Marketing & Acquisition
While VantageScore® credit score super-prime consumers carried the lowest average credit card balance of all credit tiers in Q4 2012 ($2,581), this group experienced the greatest average balance increase (6 percent) when compared with the previous quarter. All other credit tiers had little or no change to their average credit card balance.
Using a more inclusive scoring model such as the new VantageScore® 3.0, lenders can score up to 30 million consumers who are labeled "unscoreable" by traditional models. Nearly 25 percent of these consumers are prime or near-prime credit quality.
While the overall average VantageScore® for consumers in Q4 2012 was 748, the average score can vary greatly by specific loan product. For example, the average VantageScore for consumers with a home equity line of credit is 864, which is the highest average score for all products, reflecting tighter lending requirements. Student loans have the lowest average VantageScore of 695.
Spending on debit and prepaid cards in the United States topped $2 trillion in 2011, with 75 percent of this purchase volume being non-ATM transactions. The evolution of marketing knowledge and tactics for the U.S. debit card market can be applied to other countries migrating payment from cash to noncash transactions.
The average unscoreable consumer has a good job and a better-than-adequate credit profile. Sixty-one percent of unscoreable consumers hold professional level or skilled labor jobs, 30 percent have credit profiles that fall into the super prime/prime category and 20 percent are considered near-prime.
According to a recent survey that asked Americans about their understanding of credit scores 83 percent have checked their credit scores and nearly half (42 percent) want to improve credit scores, but don’t know how. Sixty-five percent of respondents indicated they consider their credit score when engaging in credit-related activities such as applying for a new card or skipping a payment. When it comes to gender and credit, women (68 percent) are more likely than men (61 percent) to consider their credit score before making credit usage decisions.
Roughly 70 percent of credit scores change by up to 20 points in any given 90-day window. Most consumers experience a score improvement rather than a score drop, with 56 percent of consumers shifting higher, 34 percent shifting lower and 10 percent staying the same.
Bankcard originations have continued to increase, with Q3 2012 originations increasing 32 percent over Q3 2011. On average, 66 percent of the population now holds one or more bankcards. However, the percentage of consumers who have a bankcard varies greatly by VantageScore® tier:
To learn the status of Americans' current credit card spending, Credit.com recently compiled a list of the states with the highest average bankcard balance per consumer in the third quarter of 2012. While several Northeastern states dominated the list, Alaska took first place, with an average bankcard balance per consumer of $5,572. On the other end of the spectrum, North Dakota and Iowa had the lowest bankcard balances, at $3,595 and $3,624, respectively.
Returns on investment from superior customer-centric strategies easily can exceed 20 percent in the first year of implementation. However, this number is compounded exponentially in subsequent years due to repeat business, new customer referrals and customer loyalty. Learn more about the design and deployment of holistic retail bank customer-centric strategies that synthesize critical information and qualitative banker insights. Source: Implementing differentiated customer-centric strategies: Retail-banker-friendly strategy development that resonates with your customers and shareholders, an Experian white paper.
Six states are the top producers of turkeys: Minnesota at 46 million, North Carolina at 36 million, Arkansas at 29 million, Missouri at 17.5 million, Virginia at 17 million and Indiana at 16.5 million. This accounts for nearly two-thirds of turkeys produced in the United States as of September 2012. The average wholesale price for frozen whole turkey during fourth-quarter 2012 is projected to range from $1.10 to $1.14 per pound -- similar to the 2011 fourth-quarter average price of $1.11 per pound. The average retail price for whole frozen turkeys in September 2012 was $1.62, about 6 cents lower than the average retail price for whole frozen turkeys in September 2011. Source: National Agricultural Statistics Service (NASS), Agricultural Statistics Board and United States Department of Agriculture (USDA).
As of Q2 2012, subprime borrowers are carrying the largest retail card balances, with an average card balance per account of $620 and $700 for VantageScore® credit score D and F tiers, respectively. The national average balance on a retail account is $329 — an increase of 39 percent over 2011. VantageScore® credit score A tier (super-prime) consumers carry the lowest average balance at $99 per account. Source: Experian-Oliver Wyman Market Intelligence Reports. VantageScore® is owned by VantageScore Solutions, LLC.
Returns on investment from superior customer-centric strategies easily can exceed 20 percent in the first year of implementation. However, this number is compounded exponentially in subsequent years due to repeat business, new customer referrals and customer loyalty. Learn more about the design and deployment of holistic retail bank customer-centric strategies that synthesize critical information and qualitative banker insights. Source: Implementing differentiated customer-centric strategies: Retail-banker-friendly strategy development that resonates with your customers and shareholders, an Experian white paper.
Not surprisingly, bankcard utilization is the highest among subprime consumers with VantageScore D and F tiers having average bankcard utilization rates of 68% and 81% respectively. In comparison, VantageScore A tier (super prime) consumers had an average bankcard utilization rate of 6% and VantageScore B tier (prime) consumers had an average bankcard utilization rate of 15%. Join our panel of experts on October 23 to hear from industry experts on key regulations that are changing the way banks need to conduct business in order to grow and stay profitable. Source: Experian Oliver Wyman Market Intelligence Reports.
By: Mike Horrocks It has been over a year that in Zuccotti Park the Occupy Wall Street crowd made their voices heard. At the anniversary point of that movement, there has been a lot of debate on if the protest has fizzled away or is still alive and planning its next step. Either way, it cannot be ignored that it did raise a voice in how consumers view their financial institutions and what actions they are willing to take i.e. “Bank Transfer Day”. In today’s market customer risk management must be balanced with retention strategies. For example, here at Experian we value the voice of our clients and prospects and I personally lead our win/loss analysis efforts. The feedback we get from our customers is priceless. In a recent American Banker article, some great examples were given on how tuning into the voice of the consumer can turn into new business and an expanded market footprint. Some consumers however will do their talking by looking at other financial institutions or by slowly (or maybe rapidly) using your institution’s services less and less. Technology Credit Union saw great results when they utilized retention triggers off of the credit data to get back out in front of their members with meaningful offers. Maximizing the impact of internal data and spotting the customer-focused trends that can help with retention is even a better approach, since that data is taken at the “account on-us” level and can help stop risks before the customer starts to walk out the door. Phillip Knight, the founder of Nike once said, “My job is to listen to ideas”. Your customers have some of the best ideas on how they can be retained and not lost to the competitors. So, think how you can listen to the voice and the actions of your customers better, before they leave and take a walk in the park.