Credit reports and conventional credit scores give lenders a strong starting point for evaluating applicants and managing risk. But today’s competitive environment often requires deeper insights.
Experian develops industry-leading credit attributes and models using traditional methods, as well as the latest techniques in machine learning, advanced analytics and Alternative credit data — or expanded Fair Credit Reporting Act (FCRA)-regulated data)1 to unlock valuable consumer spending and payment information so businesses can drive better outcomes, optimize risk management and better serve consumers
READ MORE: What is Alternative Credit Data?
Turning credit data into digestible credit attributes
Lenders rely on credit attributes — specific characteristics or variables based on the underlying data — to better understand the potentially overwhelming flow of data from traditional and non-traditional sources. However, choosing, testing, monitoring, maintaining and updating attributes can be a time- and resource-intensive process.
Experian has over 45 years of experience with data analytics, modeling and helping clients develop and manage credit attributes and risk management. Currently, we offer over 4,500 attributes to lenders, including core attributes and subsets for specific industries. These are continually monitored, and new attributes are released based on consumer trends and regulatory requirements.2
Lenders can use these credit attributes to develop precise and explainable scoring models and strategies. As a result, they can more consistently identify qualified prospects that might otherwise be missed, set initial limits, manage credit lines, improve loyalty by applying appropriate treatments and limit credit losses.
Using expanded credit data effectively
Leveraging credit attributes is critical for portfolio growth, and businesses can use their expanding access to credit data and insights to improve their credit decisioning. A few examples:
- Spot trends in consumer behavior: Going beyond a snapshot of a credit report, Trended 3DTM attributes reveal and make it easier to understand customers’ behavioral patterns. Use these insights to determine when a customer will likely revolve, transact, transfer a balance or fall into distress.
- Dig deeper into credit data: Making sense of vast amounts of credit report data can be difficult, but Premier AttributesSM aggregates and summarizes findings. Lenders use the 2,100-plus attributes to segment populations and define policy rules. From prospecting to collections, businesses can save time and make more informed decisions across the customer lifecycle.
- Get a clear and complete picture: Businesses may be able to more accurately assess and approve applicants, simply by incorporating attributes overlooked by traditional credit bureau reports into their decisioning process. Clear View AttributesTM uses data from the largest alternative financial services specialty bureau, Clarity Services, to show how customers have used non-traditional lenders, including auto title lenders, rent-to-own and small-dollar credit lenders.
The additional credit attributes and analysis help lenders make more strategic approval and credit limit decisions, leading to increased customer loyalty, reduced risk and business growth. Additionally, many organizations find that using credit attributes and customized strategies can be important for measuring and reaching financial inclusion goals.
About 25 percent of U.S. consumers have a thin credit file (fewer than five credit accounts). And about 19 percent of consumers either don’t have a credit file or don’t have information for conventional scoring models to score them.3 Expanded credit data and attributes can help lenders accurately evaluate many of these consumers and remove barriers that keep them from accessing mainstream financial services.
READ MORE: How Expanded FCRA Data Is Revolutionizing the Credit Universe
There’s no time to wait
Businesses can expand their customer base while reducing risk by looking beyond traditional credit bureau data and scores. About 60 percent of U.S. financial institutions are already using or plan to use alternative data, machine learning, AI and advanced analytics in their credit decisioning.3
Download our latest e-book on credit attributes to learn more about what Experian offers and how we can help you stay ahead of the competition.