Annual
Consumer Spending

Experian TAPS^SM is the first commercially available algorithm that uses credit data to calculate annual consumer spending.

• Algorithm calculates the last 12 months of total card spend
• Validated on the accounts of multiple card issuers and network trade lines
• TAPS is complementary to Vantage Score, credit line strategies and utilization and thus can rank within sub-segments.

• Does it work? Predicted Consumer Spend vs. Actual Consumer Spend

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  • An independent validation sample was scored and compared with actual consumer spend over 10 vintages of 12 months: R²= .78
  • A similar validation on a different issuer was also conducted: R²= .87
  • R²or “Coefficient of Determination” is a measure of the proportion of variability that two variables share, or in other words how much one can be explained by the other.
  • The Coefficient of Determination above of .87 means that approximately 87% of the variability of each variable is shared with the other.
  

• Accurately captures annual consumer spend

• The TAPS algorithm discriminates consumer spend, accurately and independent of balances, with R²of 0.75-0.85

  

  

• Complements income models

• TAPS varies significantly within Income Insight bins

  

  

• Will allow targeting across multiple risk bands

• VantageScore is not correlated with consumer spend. TAPS is a necessary complement to a risk score.

  

  

• Use with bank products

• Deposit balances are significantly correlated with TAPS.

  

  

• HELOC

• HELOC balances are also correlated with TAPS.