Everything you need to know - LendIt Conference ?· Everything you need to know about trended credit…

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  • Everything you need to know about trended credit data

    LendIt USA 2017

  • LendIt USA 2017

    About our speaker:

    Paul DeSaulniers Sr. Director, Experian Email: Paul.Desaulniers@experian.com Phone: 714.830.7580


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    1. Trended data 101

    2. How Trended Data helps lenders

    3. Leverage the power of trended data

    4. Best practices

    5. Q&A



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    Who is going to win?



    Finish Line

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    What if I showed you an additional snap shot?


    B A

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    What if I showed you a second snap shot?


    B A

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    Or all three together?



    Finish Line

    B A

    B A

    Time O-2

    Time O-1

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    Who would you bet on?


    Image source: www.sport-it.net

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    Market perspective on trended data


    An underutilized tool today due to technology barriers

    Intuitively trended data sounds like a no-brainer (with value seen across the credit chain of acquisitions, origination and account management) but the limitations of technology have historically prevented its widespread use. Change after all requires people, process and technology; and trended data has historically been difficult to deploy with a lot of testing required and ultimately needs the customers to adjust their decisioning, acquisition, offering and other strategies.

    Barclays Research October 6, 2016

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    Understand trended data beyond the buzz word

    Learn what trended data can tell you across the Customer Life Cycle to improve your business

    Most effective uses of trended data

    How to use trended data to solve your most pressing business challenges



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    Trended Data24 months of history on key data fields for every trade


    Trade #1 Balance Credit limitMinimum

    payment dueAccount payment

    Date of payment

    Month 0 $13,300 $25,800 $275 $1,000 Aug

    Month 1 $14,680 $25,800 $280 $1,000 July

    Month 2 $16,060 $25,800 $286 $1,000 June

    Month 3 $17,440 $25,800 $297 $1,000 May

    Month 4 $18,820 $25,800 $310 $1,000 April

    Month 5 $20,200 $25,800 $330 $1,000 March

    Month 6 $21,580 $25,800 $343 $1,000 February

    Month 7 $22,960 $25,800 $350 $1,000 January

    Trade #1

    Bank name Account #

    Open date Credit limit Balance

    Actual payment

    Loan type

    Account condition

    Account status

    Special comment

    Months reporting

    Minimum payment


    Months since


    Date of payment

    Visa 4812 3/9/1990 $25,800 $13,300 $1,000 Credit card OPEN CURR ACCT CH 231 $275 1 Aug-13

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    A unique profile of a consumer


    FebruaryVantageScore 720Balance $22,000 Status Good standing

    Month Balance Min Pay Due Actual PayJan $22,000 $550 $2,000 Dec $26,000 $650 $3,500 Nov $20,000 $500 $12,000 Oct $28,000 $700 $8,000 Sep $35,000 $875 $6,000 Aug $45,000 $1,125 $11,000 Jul $48,000 $1,200 $3,000

    Month Balance Min Pay Due Actual PayJan $22,000 $550 $550 Dec $19,000 $475 $475 Nov $16,000 $400 $400 Oct $15,000 $375 $400 Sep $11,500 $288 $320 Aug $9,000 $225 $300 Jul $6,500 $163 $200

    Consumer A Consumer BFebruary

    VantageScore 720Balance $22,000 Status Good standing

    Paying well over minimum payments Demonstrated ability to pay No payment stress

    X Making minimum payments for the last three months X Payment amounts vs. minimum due is decreasing over time X Increasing payment stress


    e D






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    Differentiating consumers through payment data


    Consumer A Consumer B Consumer C Average monthly balance $3,462 $3,435 $3,465 VantageScore 740 736 744

    Monthly balanceand payments

    Total annual payments $1,126 $22,390 $42,429 Average % of balance paid 2.6% 53.4% 100.0%

    Who is the best prospective customer?

    $- 0





    Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

    Total Bankcard BalanceTotal Bankcard Payments

    Jan Feb Mar Apr May Jun Jul Aug Sep Oct NovDec Jan Feb Mar Apr May Jun Jul Aug Sep Oct NovDec

    Historical payment data enables a much better understanding of how a consumer uses their bankcard accounts

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    How trended data helps lenders


    Knowing a consumers credit information at a single point in time only tells part of the story

    To understand the whole story, lenders need the ability to assess a consumers credit behavior over time

    Understanding how a consumer uses credit or pays back debt over time can help lenders: Offer the right products & terms to increase response rates Determine up sell and cross sell opportunities Prevent attrition Identify profitable customers Avoid consumers with payment stress Limit loss exposure

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    The challenge with trended data


    How do you find the payment pattern?

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    10 trades

    24 months

    1,200 DATA POINTS

    1 consumer

    5 historical

    payment fields

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    and more data!


    10 trades

    24 months

    120,000,000 DATA POINTS

    100,000 consumers

    5 historical

    payment fields

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    But there is a solution to help clients unlock the power of trended data..


    Credit Profile Point-in-time snapshot

    of a consumers credit standing

    Trended Data Dynamic story

    of how a consumer is using credit over time

    Credit3D Solutions that

    unlock the power of the credit profile and trended data


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    Trended Data Time Line


    1998 2000 2002 2004 2006 2008 2010 2012 2013 2014 2015 2016 2017

    1998 Experian launches Credit Trends

    2001 First batch

    product TrendView

    (73 attributes)

    2002 Launch Trended

    Raw Archive


    2005 Custom

    trended data models on Exp. data

    2010 Experian launches:

    Short term (108)

    Credit Line Mgmt (56)

    2012 Experian launches

    TAPS (Total Annual

    Plastic Spend)

    2013 Payment Stress

    (132) Balance transfer


    2014-2015Experian extends trade table by 18 new fields and launches

    EIRC (Estimated Interest Rate Calculator)

    Experian is the first in the industry to provide trade level spend, yield and revenue data by industry in a non-consortium


    2016 Experian launches

    Trended Data in on-line credit


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    Trended Data/ Credit3D A comprehensive view of the consumer


    Payment behavior: MIN PAY 2%

    Annual card spend: $7,500

    6 month yield: $ 74

    Average effective APR 16.99%

    In the market? Personal Loan

    BT Index (0-999) 875

    BTs in last 12 months 2

    Revolving trades: 4

    Transacting trades: 0

    Surfer, Transactor- Segment ID

    Utilization increase in last 6 months:

    + 35%

    Credit card balance last 6 months:

    + $8,000




    Credit3D leverages

    behavioral insight to improve risk, tap into new credit segments,

    improve response, profitability and develop market share strategies

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    Experian TAPS Annual credit card spend Estimated Interest Rate Calculator Interest rate and term information

    for personal loan, student loan, auto, revolving bankcard, retail bankcard and mortgage

    Extended Trade Trade-level profitability metrics Custom models Client initiated

    Trend View Identify revolving / transacting


    Short-Term Attributes Capture balance / utilization


    Line Management Attributes Identity limit changes Payment Stress Attributes Aggregate payment data Custom attributes Client initiated

    In the Market Models Propensity to open auto, personal

    loan, student loan, mortgage, HELOC and bankcard

    Balance Transfer Index Propensity to balance transfer Balance Transfer Surfer Overlay Propensity to be a rate surfer Custom scores Client initiated

    Leverage the power of Trended Data


    Trended attributesProfitability modelsPropensity scores

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    Credit3D / Trended Data capabilities


    Who is likely to respond to an offer? Balance Transfer Index

    In the Market Model

    Likelihood to balance transfer in 6 months

    Likelihood to open a trade in next 90 days

    Is there a better way to understand risk or to conduct swap set analysis?

    Payment Stress Attributes

    Deleveraging Attributes

    Level of consumer payments against balances

    Change in total payment obligations over time

    Short-Term Attributes Changes in revolving balance and utilization

    How can I acquire profitable consumers? How do I increase wallet share and usage?

    EIRC for Revolving

    Experian TAPS

    Yield in the last 6 months and effective APR

    Credit card spend in last 12 months

    How does a consumer use credit? How do I identify revolvers, transactors and consolidators?

    Trend View Revolving / transacting trades / balance transfer activity /seasonality Trend View Segment ID

    Business Challenge Solution What clients receive

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    Comprehensive Credit Marketing using Trended Data/Credit 3D


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    Marketing strategy should be about more than just response rate. A comprehensive approach can ensure quality originations and healthy portfolio growth. Response Rate Risk Expansion Long-term Value

    Three Pillars of Comprehensive Prescreen


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    How do you reach receptive audiences to get the most out of your marketing campaigns?

    Offer timing Offer relevance

    Combine propensity models and offer relevance to get the right consumers the right offer at the right time.

    Response Rate: Make an ImpactMost people dont need your product; are you effectively finding those that do?


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    Risk Expansion: Not Your Average JoeRisk expansion without all the risk


    Current Profile Credit Score: 641 Utilization: 41% Revolving and Personal Trades: 4 Outstanding Balances: $13,000 Whats Joe Doing? Making more than the monthly payment to pay down revolving debt Seeking personal loan to consolidate remaining balance Wants one monthly payment at a lower interest rate than revolving

    cards Wheres Joe Going? Prime risk score as a result of decreased utilization Building new borrowing relationships How do you spot the trend? Declining trended utilization indicating deleveraging Ability to pay indicated by estimated income

    ` Past Present Future

    Score 618 641 703

    Utilization 66% 41% 23%

    Trades 6 4 4

    Balances $21,000 $13,000 $6,000

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    Maximize response rates: Propensity tools arent enough. Layering credit attributes can further refine results and improve campaign performance.

    Risk expansion: Expand risk score cutoffs without taking on incremental risk. Trended data helps identify trends in credit behavior. Find candidates in lower score ranges who are deleveraging and trending up.

    Long-term value: Understanding how a consumer uses credit enables long-term loyalty building. Give your team the edge by identifying likely short-term and long-term borrowers.

    Think comprehensive


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  • LendIt USA 2017

    Paul DeSaulniers Sr. Director, Experian Email: Paul.Desaulniers@experian.com Phone: 714.830.7580



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