FICO Collection Score
One FICO score that not many people know about is the FICO collection score. There are actually three FICO collection scores, cycle 1, cycle 2 and cycle 3 scores. For cycle 1 and 2 scores, these estimate how likely a debtor is to roll into cycle 3.Cycle 3 scores order accounts by their expected collection amounts.
FICO hasn’t shared any information on how these scores are calculated or what the range is of these scores. They are not publicly available to consumers and the majority of people won’t have a FICO collection score (unless they have delinquent accounts). These scores are available to all of North America (Canada included) and the UK, which is very different from the regular score they offer.
Why Do Debt Collectors Use This Score?
FICO claims there are a number of benefits to using their collection score and they are as follows:
- Increase collections by 20%
- Reduce roll-rates
- Minimize charge offs
- Improve customer service (preventative measures to stop upsetting “best” customers with too many collection calls)
Despite these claimed benefits most collection agencies use an in house collection model to help them rank debts and how to work those debts.