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Are You #TeamTrended or #TeamAlternative? There’s no such thing as too much data, but when put head to head, differences between the data sets are apparent. Which team are you on? Here’s what we know: With the entry and incorporation of alternative credit data into the data arena, traditional credit data is no longer the sole determinant for credit worthiness, granting more people credit access. Built for the factors influencing financial health today, alternative credit data essentially fills the gaps of the traditional credit file, including alternative financial services data, rental payments, asset ownership, utility payments, full file public records, and consumer-permissioned data – all FCRA-regulated data. Watch this video to see more:    Trended data, on the other hand shows actual, historical credit data. It provides key balance and payment data for the previous 24 months to allow lenders to leverage behavior trends to determine how individuals are utilizing their credit. Different splices of that information reveal particular behavior patterns, empowering lenders to then act on that behavior. Insights include a consumer’s spend on all general purpose credit and charge cards and predictive metrics that identify consumers who will be in the market for a specific type of credit product. In the head-to-head between alternative credit data and trended data, both have clear advantages. You need both on your roster to supplement traditional credit data and elevate your game to the next level when it comes to your data universe. Compared to the traditional credit file, alternative credit data can reveal information differentiating two consumers. In the examples below, both consumers have moderate limits and have making timely credit card payments according to their traditional credit reports. However, alternative data gives insight into their alternative financial services information. In Example 1, Robert Smith is currently past due on his personal loan, whereas Michelle Lee in Example 2 is current on her personal loan, indicating she may be the consumer with stronger creditworthiness.   Similarly, trended data reveals that all credit scores are not created equal. Here is an example of how trended data can differentiate two consumers with the same score. Different historical trends can show completely different trajectories between seemingly similar consumers.   While the traditional credit score is a reliable indication of a consumer’s creditworthiness, it does not offer the full picture. What insights are you missing out on? Go to Infographic Get Started Today

Experian Boost gives consumers greater control over their credit profiles by allowing them to add non-traditional credit information to their Experian credit file.

From the time we wake up to the minute our head hits the pillow, we make about 35,000 conscious and unconscious decisions a day. That’s a lot of processing in a 24-hour period. As part of that process, some decisions are intuitive: we’ve been in a situation before and know what to expect. Our minds make shortcuts to save time for the tasks that take a lot more brainpower. As for new decisions, it might take some time to adjust, weigh all the information and decide on a course of action. But after the new situation presents itself over and over again, it becomes easier and easier to process. Similarly, using traditional data is intuitive. Lenders have been using the same types of data in consumer credit worthiness decisions for decades. Throwing in a new data asset might take some getting used to. For those who are wondering whether to use alternative credit data, specifically alternative financial services (AFS) data, here are some facts to make that decision easier. In a recent webinar, Experian’s Vice President of Analytics, Michele Raneri, and Data Scientist, Clara Gharibian, shed some light on AFS data from the leading source in this data asset, Clarity Services. Here are some insights and takeaways from that event. What is Alternative Financial Services? A financial service provided outside of traditional banking institutions which include online and storefront, short-term unsecured, short-term installment, marketplace, car title and rent-to-own. As part of the digital age, many non-traditional loans are also moving online where consumers can access credit with a few clicks on a website or in an app. AFS data provides insight into each segment of thick to thin-file credit history of consumers. This data set, which holds information on more than 62 million consumers nationwide, is also meaningful and predictive, which is a direct answer to lenders who are looking for more information on the consumer. In fact, in a recent State of Alternative Credit Data whitepaper, Experian found that 60 percent of lenders report that they decline more than 5 percent of applications because they have insufficient information to make a loan decision. The implications of having more information on that 5 percent would make a measurable impact to the lender and consumer. AFS data is also meaningful and predictive. For example, inquiry data is useful in that it provides insight into the alternative financial services industry. There are also more stability indicators in this data such as number of employers, unique home phone, and zip codes. These interaction points indicate the stability or volatility of a consumer which may be helpful in decision making during the underwriting stage. AFS consumers tend to be younger and less likely to be married compared to the U.S. average and traditional credit data on File OneSM . These consumers also tend to have lower VantageScore® credit scores, lower debt, higher bad rates and much lower spend. These statistics lend themselves to seeing the emerging consumer; millennials, immigrants with little to no credit history and also those who may have been subprime or near prime consumers who are demonstrating better credit management. There also may be older consumers who may have not engaged in traditional credit history in a while or those who have hit a major life circumstance who had nowhere else to turn. Still others who have turned to nontraditional lending may have preferred the experience of online lending and did not realize that many of these trades do not impact their traditional credit file. Regardless of their individual circumstances, consumers who leverage alternative financial services have historically had one thing in common: their performance in these products did nothing to further their access to traditional, and often lower cost, sources of credit. Through Experian’s acquisition and integration of Clarity Services, the nation’s largest alternative finance credit bureau, lenders can gain access to powerful and predictive supplemental credit data that better detect risk while benefiting consumers with a more complete credit history. Alternative finance data can be used across the lending cycle from prospecting to decisioning and account review to collections. Alternative data gives lenders an expanded view of consumer behavior which enables more complete and confident lending decisions. Find out more about Experian’s alternative credit data: www.experian.com/alternativedata.

We’ve popped the bottles at midnight, now it’s time to burst the reality bubble. Countdown: t-minus less than 90 days until what is for many the dreaded April 15 tax deadline. Tax Season - Get Started Coupled with debt consolidation post-holidays, January is a harsh contrast to all the feasting and festivities of the holiday season. However, the tax season doesn’t necessarily have to be synonymous with doom and gloom – many Americans look forward to receiving a tax refund. And of those people expecting a tax refund, 35% of consumers said they would use it to pay down debt, according to the National Retail Federation. Lenders and financial institutions can help their consumers get off on the right financial foot for 2019 by helping them to pay down their debt. Here are 5 tools you need to have this tax season to make the most of your collections efforts:   1. Identify your target market – Tax Season Payment IndicatorTM Did you know the average tax refund in 2016 and 2017 was over $2,760, according to the IRS? Also, during the 2017 tax season, 45 million consumers paid at least $500 and 10% or more of a tradeline balance(s), according to Experian data. Tax Season Payment Indicator examines payment behavior over the past two years to determine whether a consumer has made a large payment to a tradeline balance – or balances – during tax season. 2. Keep up-to-date on consumer information – Clear ProfileTM Skip tracing just got easier. Narrow in on the right contact information for your past-due consumer using Clear Profile. Leveraging Clarity Service’s database, Clear Profile provides the most recent and historical demographic elements associated with your consumer’s previous applications including addresses, phone numbers, employers, emails and banks. 3. Know the right time to collect – Collection TriggersSM Take the guesswork out of how to manage your collections efforts. Track your accounts to notify you of a new contact information and changes that indicate your past-due consumers’ ability to pay. 4. Stay ahead of fraudsters – CrossCoreTM Fraudsters are everywhere, so protect your customers and your organization by monitoring your portfolio to keep fraudulent accounts from being opened.     Still wondering how to get tax season ready? Get Your Collections Tax Season Ready

With scarce resources and limited experience available in the data science field, a majority of organizations are partnering with outside firms to fill gaps within their teams. A report compiled by Hexa Research found that the data analytics outsourcing market is set to expand at a compound annual growth rate of 30 percent between 2016 and 2024, reaching annual revenues of more than $6 billion. With data science becoming a necessity for success, outsourcing these specific skills will be the way of the future. When working with outside firms, you may be given the option between offshore and onshore resources. But how do you decide? Let’s discuss a few things you can consider. Offshore A well-known benefit of using offshore resources is lower cost. Offshore resources provide a larger pool of talent, which includes those who have specific analytical skills that are becoming rare in North America. By partnering with outside firms, you also expose your organization to global best practices by learning from external resources who have worked in different industries and locations. If a partner is investing research and development dollars into specific data science technology or new analytics innovations, you can use this knowledge and apply it to your business. With every benefit, however, there are challenges. Time zone differences and language barriers are things to consider if you’re working on a project that requires a large amount of collaboration with your existing team. Security issues need to be addressed differently when using offshore resources. Lastly, reputational risk also can be a concern for your organization. In certain cases, there may be a negative perception — both internally and externally — of moving jobs offshore, so it’s important to consider this before deciding. Onshore While offshore resources can save your organization money, there are many benefits to hiring onshore analytical resources. Many large projects require cross-functional collaboration. If collaboration is key to the projects you’re managing, onshore resources can more easily blend with your existing resources because of time zone similarities, reduced communication barriers and stronger cultural fit into your organization. In the financial services industry, there also are regulatory guidelines to consider. Offshore resources often may have the skills you’re looking for but don’t have a complete understanding of our regulatory landscape, which can lead to larger problems in the future. Hiring resources with this type of knowledge will help you conduct the analysis in a compliant manner and reduce your overall risk. All of the above Many of our clients — and we ourselves — find that an all-of-the-above approach is both effective and efficient. In certain situations, some timeline reductions can be made by having both onshore and offshore resources working on a project. Teams can include up to three different groups: Local resources who are closest to the client and the problem Resources in a nearby foreign country whose time zone overlaps with that of the local resources More analytical team members around the world whose tasks are accomplished somewhat more independently Carefully focusing on how the partnership works and how the external resources are managed is even more important than where they are located. Read 5 Secrets to Outsourcing Data Science Successfully to help you manage your relationship with your external partner. If your next project calls for experienced data scientists, Experian® can help. Our Analytics on DemandTM service provides senior-level analysts, either offshore  or onshore, who can help with analytical data science and modeling work for your organization.

2019 is here — with new technology, new regulations and new opportunities on the docket. What does that mean for the financial services space? Here are the five trends you should keep your eye on and how these affect your credit universe.   1. Credit access is at an all-time high With 121 million Americans categorized as credit-challenged (subprime scores and a thin or nonexistent credit file) and 45 million considered credit-invisible (no credit history), the credit access many consumers take for granted has appeared elusive to others. Until now. The recent launch of Experian BoostTM empowers consumers to improve their credit instantly using payment history from their utility and phone bills, giving them more control over their credit scores and making them more visible to lenders and financial institutions. This means more opportunities for more people. Coupled with alternative credit data, which includes alternative financial services data, rental payments, and full-file public records, lenders and financial institutions can see a whole new universe. In 2019, inclusion is key when it comes to universe expansion goals. Both alternative credit and consumer-permissioned data will continue to be an important part of the conversation.   2. Machine learning for the masses The financial services industry has long been notorious for being founded on arguably antiquated systems and steeped in compliance and regulations. But the industry’s recent speed of disruption, including drastic changes fueled by technology and innovation, may suggest a changing of the guard. Digital transformation is an industry hot topic, but defining what that is — and navigating legacy systems — can be challenging. Successfully integrating innovation is the convergence at the center of the Venn diagram of strategy, technology and operations. The key, according to Deloitte, is getting “a better handle on data to extract the greatest value from technology investments.” How do you get the most value? Risk managers need big data, machine learning and artificial intelligence strategies to deliver market insights and risk evaluation. Between the difficulty of leveraging data sets and significant investment in time and money, it’s impossible for many to justify. To combat this challenge, the availability and access to an analytical sandbox (which contains depersonalized consumer data and comparative industry intel) is crucial to better serve clients and act on opportunities in lenders’ credit universe and beyond. “Making information analysis easily accessible also creates distinct competitive advantages,” said Vijay Mehta, Chief Innovation Officer for Experian’s Consumer Information Services, in a recent article for BAI Banking Strategies. “Identifying shifts in markets, changes in regulations or unexpected demand allows for quick course corrections. Tightening the analytic life cycle permits organizations to reach new markets and quickly respond to competitor moves.” This year is about meaningful metrics for action, not just data visualization.   3. How to fit into the digital-first ecosystem With so many things available on demand, the need for instant gratification continues to skyrocket. It’s no secret that the financial services industry needs to compete for attention across consumers’ multiple screens and hours of screen time. What’s in the queue for 2019? Personalization, digitalization and monetization. Consumers’ top banking priorities include customized solutions, omnichannel experience improvement and enhancing the mobile channel (as in, can we “Amazonize” everything?). Financial services leaders’ priorities include some of the same things, such as enhancing the mobile channel and delivering options to customize consumer solutions (BAI Banking Strategies). From geolocation targeting to microinteractions in the user experience journey to leveraging new strategies and consumer data to send personalized credit offers, there’s no shortage of need for consumer hyper-relevance. 33 percent of consumers who abandon business relationships do so because personalization is lacking, according to Accenture data for The Financial Brand. This expectation spans all channels, emphasizing the need for a seamless experience across all devices.   4. Keeping fraudsters out Many IT professionals regard biometric authentication as the most secure authentication method currently available. We see this technology on our personal devices, and many companies have implemented it as well. Biometric hacking is among the predicted threats for 2019, according to Experian’s Data Breach Industry Forecast, released last month. “Sensors can be manipulated and spoofed or deteriorate with too much use. ... Expect hackers to take advantage of not only the flaws found in biometric authentication hardware and devices, but also the collection and storage of data,” according to the report.   5. Regulatory changes and continued trends  Under the Trump Administration, the regulatory front has been relatively quiet. But according to the Wall Street Journal, as Democrats gain control of the House of Representatives, lawmakers may be setting their sights on the financial services industry — specifically on legislation in response to the credit data breach in 2017. The Democratic Party leadership has indicated that the House Financial Services Committee will be focused on protecting consumers and investors, preserving sector stability, and encouraging responsible innovation in financial technology, according to Deloitte. In other news, the focus on improving accuracy in data reporting, transparency for consumers in credit scoring and other automated decisions can be expected to continue. Consumer compliance, and specifically the fair and responsible treatment of consumers, will remain a top priority.   For all your needs in 2019 and beyond, Experian has you covered. Learn more

Today, we’re excited to announce that AutoCheck® has received a facelift! AutoCheck has always been the industrial strength Vehicle History Report that automotive professionals trust to help manage risk and confidently buy and sell the right vehicles. We’ve made this great tool even greater by adding more data and accident insights than ever before and improving the user experience by making it easier to read across all mobile devices. Among the data and insights updated within AutoCheck: Updated display of how buyback protection details are presented Vehicle ownership history presentation Vehicle use history details Updated accident and damage check sections Updated display of how title brand information is displayed Updated odometer check Open safety recall information, inspection, service and repair history checks Based on extensive research, we’ve added many visual changes which make it easier for dealers and cars shoppers to understand and use the full report. One noticeable change is the addition of the Experian logo and color scheme. Experian continues to invest significantly in building a widely recognized and trusted brand. Reinforcing that AutoCheck is backed by Experian’s rich data and industry expertise will resonate with consumers as they look for a trusted source to confidently move along their vehicle shopping journey. The AutoCheck Score® has a new visualization, designed after an automotive-themed gauge to illustrate if the vehicle’s AutoCheck Score is below, within or above the score range for similar vehicles. Making the score easier to use and understand will help consumers better compare their vehicle to other similar vehicles currently in the market. We’ve also made the report easier to use and access for both consumers and dealers. AutoCheck is now optimized for tablet and mobile users, providing even more shopping convenience for users. As always, dealers can access the new report via AutoCheck Fast Link℠ for their online vehicle listings and through multiple integrations within their DMS or inventory management solution. The report will still be available directly from AutoCheck.com for consumers and AutoCheck.com/members for dealers. In addition, the report is available through most dealer platforms and all premier consumer automotive portals.   Check out the full report redesign changes, updates and some additional highlights below. Updated AutoCheck® Buyback Protection Information As always, AutoCheck will buy back your vehicle if your AutoCheck report fails to list certain title brands available to Experian at the time the report was issued. Items impacting Buyback protection are now grouped together, so users can clearly see what data impacts Buyback qualification.  Items that do not impact Buyback are captured in other areas of the report. Buyback Protection badging for eligible clients displays on the first page as well as in the specific State Title Brand section if the vehicle is, or is not, Buyback protected. NEW: Owner History AutoCheck now displays information for the current, last and previous vehicle ownership. The report will now highlight the year and state the vehicle was purchased from as well as the ownership date ranges and length of ownership. NEW: Vehicle Usage AutoCheck now clearly highlights the historical usage activity level for the vehicle, whether it was used as Personal, Fleet, Rental, Lease, Taxi, Livery, Police, Government, Drivers Ed and/or Commercial. NEW: Damage Check Section We have added a new Damage Check section to more clearly illustrate the historical activity for the vehicle.  The Damage Check section will highlight damage records from auctions, salvage, or independent sources such as recycling and crash tests. We will continue to offer the Accident Check section, which highlights accident dates and location from government sources and independent agencies. The Damage Check section will highlight damage records from auctions, salvage auctions or independent sources such as recycling and crash tests.   Other Title Brand and Specific Event check: Other title brands that are not included in Buyback protection qualification will be listed here. In addition, event activity such as theft and insurance loss is also included in this section. UPDATED: Odometer Check We have combined information to provide one place for all odometer related history checks.  State title odometer check reflects all odometer related brands from the state such as Exceeds Mechanical Limits (EML), Not Actual Mileage (NAM) and Broken Odometer (BRK). Auction odometer check are the odometer brands either reported to auctions or upon inspection in auction announcements. The odometer calculation check is Experian’s proprietary odometer sequence calculation to determine if there are any potential discrepancies. NEW: ‘Check’ sections: To highlight specific data for easier reference and understanding, we have added an open safety recall check, Inspection history check, and service and repair history check section. What do all these changes mean for dealers and their customers? They have an easier-to-use AutoCheck VHR with more comprehensive information than ever. For dealers, it will help with their buying decisions at auction or on trade-ins. For consumers, it provides even more peace of mind when making a used vehicle purchase decision. Ultimately, it improves the shopping process for everyone involved and can help dealers develop even stronger relationships with their customers.   Want to learn even more about AutoCheck? Visit our site for more details: https://www.experian.com/lp/automotive/autocheck-dealer-lp

Auto dealers need to move their dealerships forward through hyper-local advertising that helps them connect with the right audiences at the right time.

With the new year just days behind us, and as the uptick in holiday spending comes back down, debt consolidation will take precedence along with the making (and breaking) of new year’s resolutions. Personal loans were the fastest growing unsecured lending product for much of last year. From debt consolidation to major purchases, consumers are increasingly choosing these flexible, easy-access loans over credit cards throughout the course of the year. Recent Experian research highlighted the trends around this fast-paced lending product: Previously, while industry experts had predicted a leveling off of personal loans originations, Experian data shows steady growth. Additionally, there were 35.7 million personal loan trades in the second quarter, the highest number to date since Q1 of 2007. What is driving this growth? Observations suggest growth trends across the industry as a whole – not just in the personal loans segment. And the numbers prove it. Growth is occurring across the board. Experian statistics show: Consumer confidence is up 5.6% year over year Investor confidence remains high – up 18% year over year since 1987 Unemployment remains low and continued decrease is forecasted in the near future With increased confidence and increased spending often comes increased personal loans. More financial institutions are bringing personal loans under their roofs. As many consumers enter each new year as part of a “debt consolidation nation” per se, focus for many will be on personal loans as they seek to consolidate revolving debt. Since this is a known trend, lenders across the board – from traditional financial institutions to fintechs – need to be strategic with their marketing efforts in order to reach the right consumers with the right products at the right time. Consumers consider important factors in choosing the lender(s) for their personal loans including interest rate and the ability to apply online among others. These factors see differences across generations as well. These factors and others should influence lenders’ marketing strategies, on top of their best practices. Experian partnered with Mintel Group for their insights on the 2019 trends and best practices for digital credit marketing. Register for our upcoming webinar to learn more about Digital Credit Marketing 2019 Trends and Best Practices. Register for the Webinar

Subprime originations hit the lowest overall share of the market seen in 11 years, but does that mean people are being locked out car ownership? Not necessarily, according to the Q3 State of the Automotive Finance Market report.To gain accurate insights from the vast amount of data available, it’s important to look at the entire picture that is created by the data. The decrease in subprime originations is due to many factors, one of which being that credit scores are increasing across the board (average is now 717 for new and 661 for used), which naturally shifts more consumers into the higher credit tiers. Loan origination market share are just one of the trends seen in this quarter’s report. Ultimately, examining the data can help inform lenders and help them make the right lending decisions. Exploring options for affordability While consumers analyze different possibilities to ensure their monthly payments are affordable, leasing is one of the more reasonable options in terms of monthly payments. In fact, the difference between the average new lease payment and new car payment usually averages more $100—and sometimes well over—which is a significant amount for the average American budget. In fact, leases of new vehicles are hovering around 30 percent, which is one of the factors that is aiding in new car sales. In turn, this then helps the used-vehicle market, as the high number of leases create a larger supply of quality use vehicles when they come off-lease and make their way back into the market. On-time payments continue to improve As consumer preferences continue to trend towards more expensive vehicles, such as crossovers, SUVs, and pickups, affordability will continue to be a topic of discussion. But consumers appear to be managing the higher prices, as in addition to the tactics mentioned above, 30- and 60-day delinquency rates declined since Q3 2017, from 2.39 percent to 2.23 percent and 0.76 percent to 0.72 percent, respectively. The automotive finance market is one where the old saying “no news is good news” continues to remain true. While there aren’t significant changes in the numbers quarter over quarter, this signals that the market is at a good place in its cycle. To learn more about the State of the Automotive Finance Market report, or to watch the webinar, click here.

What if you had an opportunity to boost your credit score with a snap of your fingers? With the announcement of Experian BoostTM, this will soon be the new reality. As part of an increasingly customizable and instant consumer reality in the marketplace, Experian is innovating in the space of credit to allow consumers to contribute information to their credit profiles via access to their online bank accounts. For decades, Experian has been a leader in educating consumers on credit: what goes into a credit score, how to raise it and how to maintain it. Now, as part of our mission to be the consumer’s bureau, Experian is ushering in a new age of consumer empowerment with Boost. Through an already established and full-fledged suite of consumer products, Experian Boost is the next generation offering a free online platform that places the control in the consumers’ hands to influence their credit scores. The platform will feature a sign-in verification, during which consumers grant read-only permission for Experian Boost to connect to their online bank accounts to identify utility and telecommunications payments. After they verify their data and confirm that they want the account information added to their credit file, consumers will receive an instant updated FICO® Score. The history behind credit information spans several centuries from a group of London tailors swapping information on customers to keeping credit files on index cards being read out to subscribers over the telephone. Even with the evolution of the credit industry being very much in the digital age today, Experian Boost is a significant step forward for a credit bureau. This new capability educates the consumer on what types of payment behavior impacts their credit score while also empowering them to add information to change it. This is a big win-win for consumers and lenders alike. As Experian is taking the next big step as a traditional credit bureau, adding these data sources is a new and innovative way to help consumers gain access to the quality credit they deserve as well as promoting fair and responsible lending to the industry. Early analysis of Experian’s Boost impact on the U.S. consumer credit scores showed promising results. Here’s a snapshot of some of those findings: These statistics provide an encouraging vision into the future for all consumers, especially for those who have a limited credit history. The benefit to lenders in adding these new data points will be a more complete view on the consumer to make more informed lending decisions. Only positive payment histories will be collected through the platform and consumers can elect to remove the new data at any time. Experian Boost will be available to all credit active adults in early 2019, but consumers can visit www.experian.com/boost now to register for early access. By signing up for a free Experian membership, consumers will receive a free credit report immediately, and will be one of the first to experience the new platform. Experian Boost will apply to most leading consumer credit scores used by lenders. To learn more about the platform visit www.experian.com/boost.

It’s the holiday season — time for jingle bells, lighting candles, shopping sprees and credit card fraud. But we’re prepared. Our risk analyst team constantly monitors our FraudNet solution performance to identify anomalies our clients experience as millions of transactions occur this month. At its core, FraudNet analyzes incoming events to determine the risk level and to allow legitimate events to process without causing frustrating friction for legitimate customers. That ensures our clients can recognize good customers across digital devices and channels while reducing fraud attacks and the need for internal manual reviews. But what happens when things don’t go as planned? Here’s a recent example. One of our banking clients noticed an abnormally high investigation queue after a routine risk engine tuning. Our risk analyst team looked further into the attacks to determine the cause and assess whether it was a tuning issue or a true fraud attack. After an initial analysis, the team learned that the events shared many of the same characteristics: Came from the same geo location that has been seen in previous attacks on clients Showed suspicious device and browser characteristics that were recognized by Experian’s device identification technology Identified suspicious patterns that have been observed in other recent attacks on banks The conclusion was that it wasn’t a mistake. FraudNet had correctly identified these transactions as suspicious. Experian® then worked with our client and recommended a strategy to ensure this attack was appropriately managed. This example highlights the power of device identification technology as a mechanism to detect emerging fraud threats, as well as link analysis tools and the expertise of a highly trained fraud analyst to uncover suspicious events that might otherwise go unnoticed. In addition to proprietary device intelligence capabilities, our clients take advantage of a suite of capabilities that can further enhance a seamless authentication experience for legitimate customers while increasing fraud detection for bad actors. Using advanced analytics, we can detect patterns and anomalies that may indicate a fraudulent identity is being used. Additionally, through our CrossCore® platform businesses can leverage advanced innovation, such as physical and behavioral biometrics (facial recognition, how a person holds a phone, mouse movements, data entry style), email verification (email tenure, reported fraud on email identities), document verification (autofill, liveliness detection) and digital behavior risk indicators (transaction behavior, transaction velocity), to further advance their existing risk mitigation strategies and efficacy.   With expanding partnerships and capabilities offered via Experian’s CrossCore platform, in conjunction with consultative industry expertise, businesses can be more confident during the authentication process to ensure a superb, frictionless customer experience without compromising security.

Your model is only as good as your data, right? Actually, there are many considerations in developing a sound model, one of which is data. Yet if your data is bad or dirty or doesn’t represent the full population, can it be used? This is where sampling can help. When done right, sampling can lower your cost to obtain data needed for model development. When done well, sampling can turn a tainted and underrepresented data set into a sound and viable model development sample. First, define the population to which the model will be applied once it’s finalized and implemented. Determine what data is available and what population segments must be represented within the sampled data. The more variability in internal factors — such as changes in marketing campaigns, risk strategies and product launches — and external factors — such as economic conditions or competitor presence in the marketplace — the larger the sample size needed. A model developer often will need to sample over time to incorporate seasonal fluctuations in the development sample. The most robust samples are pulled from data that best represents the full population to which the model will be applied. It’s important to ensure your data sample includes customers or prospects declined by the prior model and strategy, as well as approved but nonactivated accounts. This ensures full representation of the population to which your model will be applied. Also, consider the number of predictors or independent variables that will be evaluated during model development, and increase your sample size accordingly. When it comes to spotting dirty or unacceptable data, the golden rule is know your data and know your target population. Spend time evaluating your intended population and group profiles across several important business metrics. Don’t underestimate the time needed to complete a thorough evaluation. Next, select the data from the population to aptly represent the population within the sampled data. Determine the best sampling methodology that will support the model development and business objectives. Sampling generates a smaller data set for use in model development, allowing the developer to build models more quickly. Reducing the data set’s size decreases the time needed for model computation and saves storage space without losing predictive performance. Once the data is selected, weights are applied so that each record appropriately represents the full population to which the model will be applied. Several traditional techniques can be used to sample data: Simple random sampling — Each record is chosen by chance, and each record in the population has an equal chance of being selected. Random sampling with replacement — Each record chosen by chance is included in the subsequent selection. Random sampling without replacement — Each record chosen by chance is removed from subsequent selections. Cluster sampling — Records from the population are sampled in groups, such as region, over different time periods. Stratified random sampling — This technique allows you to sample different segments of the population at different proportions. In some situations, stratified random sampling is helpful in selecting segments of the population that aren’t as prevalent as other segments but are equally vital within the model development sample. Learn more about how Experian Decision Analytics can help you with your custom model development needs.

As our society becomes ever more dependent on everything mobile, criminals are continually searching for and exploiting weaknesses in the digital ecosystem, causing significant harm to consumers, businesses and the economy.  In fact, according to our 2018 Global Fraud & Identity Report, 72 percent of business executives are more concerned than ever about the impact of fraud. Yet, despite the awareness and concern, 54 percent of businesses are only “somewhat confident” in their ability to detect fraud. That needs to change, and it needs to change right away.  Our industry has thrived by providing products and services that root out bad transactions and detect fraud with minimal consumer friction. We continue to innovate new ways to authenticate consumers, apply new cloud technologies, machine learning, self-service portals and biometrics. Yet, the fraud issue still exists. It hasn’t gone away. How do we provide effective means to prevent fraud without inconveniencing everyone in the process? That’s the conundrum. Unfortunately, a silver bullet doesn’t exist. As much as we would like to build a system that can detect all fraud, eliminate all consumer friction, we can’t. We’re not there yet. As long as money has changed hands, as long as there are opportunities to steal, criminals will find the weak points – the soft spots.  That said, we are making significant progress. Advances in technology and innovation help us bring new solutions to market more quickly, with more predictive power than ever, and the ability to help clients to turn  these services on in days and weeks. So, what is Experian doing? We’ve been in the business of fraud detection and identity verification for more than 30 years. We’ve seen fraud patterns evolve over time, and our product portfolio evolves in lock-step to counter the newest fraud vectors. Synthetic identity fraud, loan stacking, counterfeit, identity theft; the specific fraud attacks may change but our solution stack counters each of those threats. We are on a continuous innovation path, and we need to be. Our consumer and small business databases are unmatched in the industry for quality and coverage, and that is an invaluable asset in the fight against fraud. It used to be that knowing something about a person was the same as authenticating that same person. That’s just not the case today. But, just because I may not be the only person who knows where I live, doesn’t mean that identity information is obsolete. It is incredibly valuable, just in different ways today. And that’s where our scientists come into their own, providing complex predictive solutions that utilize a plethora of data and insight to create the ultimate in predictive performance. We go beyond traditional fraud detection methods, such as knowledge-based authentication, to offer a custom mix of passive and active authentication solutions that improve security and the customer experience. You want the latest deep learning techniques? We have them. You want custom models scored in milliseconds alongside your existing data requests. We can do that. You want a mix of cloud deployment, dedicated hosted services and on-premise? We can do that too. We have more than 20 partners across the globe, creating the most comprehensive identity management network anywhere. We also have teams of experts across the world with the know how to combine Experian and partner expertise to craft a bespoke solution that is unrivaled in detection performance. The results speak for themselves: Experian analyzes more than a billion credit applications per year for fraud and identity, and we’ve helped our clients save more than $2 billion in annual fraud losses globally. CrossCore™, our fraud prevention and identity management platform, leverages the full breadth of Experian data as well as the data assets of our partners. We execute machine learning models on every decision to help improve the accuracy and speed with which decisions are made. We’ve seen CrossCore machine learning result in a more than 40 percent improvement in fraud detection compared to rules-based systems. Our certified partner community for CrossCore includes only the most reputable leaders in the fraud industry. We also understand the need to expand our data to cover those who may not be credit active. We have the largest and most unique sets of alternative credit data among the credit bureaus, that includes our Clarity Services and RentBureau divisions. This rich data helps our clients verify an individual’s identity, even if they have a thin credit file. The data also helps us determine a credit applicant’s ability to pay, so that consumers are empowered to pursue the opportunities that are right for them. And in the background, our models are constantly checking for signs of fraud, so that consumers and clients feel protected. Fraud prevention and identity management are built upon a foundation of trust, innovation and keeping the consumer at the heart of every decision. This is where I’m proud to say that Experian stands apart. We realize that criminals will continue to look for new ways to commit fraud, and we are continually striving to stay one step ahead of them. Through our unparalleled scale of data, partnerships and commitment to innovation, we will help businesses become more confident in their ability to recognize good people and transactions, provide great experiences, and protect against fraud.

Every morning, I wake up and walk bleary eyed to the bathroom, pop in my contacts and start my usual routine. Did I always have contacts? No. But putting on my contacts and seeing clearly has become part of my routine. After getting used to contacts, wearing glasses pales in comparison. This is how I view alternative credit data in lending. Are you having qualms about using this new data set? I get it, it’s like sticking a contact into your eye for the first time: painful and frustrating because you’re not sure what to do. To relieve you of the guesswork, we’ve compiled the top four myths related to this new data set to provide an in-depth view as to why this data is an essential supplement to your traditional credit file. Myth 1: Alternative credit data is not relevant. As consumers are shifting to new ways of gaining credit, it’s important for the industry to keep up. These data types are being captured by specialty credit bureaus. Gone are the days when alternative financing only included the payday store on the street corner. Alternative financing now expands to loans such as online installment, rent-to-own, point-of-sale financing, and auto-title loans. Consumers automatically default to the financing source familiar to them – which doesn’t necessarily mean traditional financial institutions. For example, some consumers may not walk into a bank branch anymore to get a loan, instead they may search online for the best rates, find a completely digital experience and get approved without ever leaving their couches. Alternative credit data gives you a lens into this activity. Myth 2: Borrowers with little to no traditional credit history are high risk. A common misconception of a thin-file borrower is that they may be high risk. According to the CFPB, roughly 45 million Americans have little to no credit history and this group may contain minority consumers or those from low income neighborhoods. However, they also may contain recent immigrants or young consumers who haven’t had exposure to traditional credit products. According to recent findings, one in five U.S. consumers has an alternative financial services data hit– some of these are even in the exceptional or very good credit segments. Myth 3: Alternative credit data is inaccurate and has poor data quality. On the contrary, this data set is collected, aggregated and verified in the same way as traditional credit data. Some sources of data, such as rental payments, are monthly and create a consistent look at a consumer’s financial behaviors. Experian’s Clarity Services, the leading source of alternative finance data, reports their consumer information, which includes application information and bank account data, as 99.9% accurate. Myth 4: Using alternative credit data might be harmful to the consumer. This data enables a more complete view of a consumer’s credit behavior for lenders, and provides consumers the opportunity to establish and maintain a credit profile. As with all information, consumers will be assessed appropriately based on what the data shows about their credit worthiness. Alternative credit data provides a better risk lens to the lender and consumers may get more access and approval for products that they want and deserve. In fact, a recent Experian survey found 71% of lenders believe alternative credit data will help consumers who would have previously been declined. Like putting in a new pair of contact lenses the first time, it may be uncomfortable to figure out the best use for alternative credit data in your daily rhythm. But once it’s added, it’s undeniable the difference it makes in your day-to-day decisions and suddenly you wonder how you’ve survived without it so long. See your consumers clearly today with alternative credit data. Learn More About Alternative Credit Data