Tag: credit

The current pandemic will affect the way financial institutions lend and provide credit. Shawn Rife, Experian’s Director of Product Scoring, discusses the ways that financial institutions can navigate the COVID-19 crisis. Check out what he had to say: What implications does the global pandemic have on financial institutions’ analytical needs?  SR: In the customer lifecycle, there are 4 different stages: prospecting, acquisitions, portfolio management, and collections. During times of economic uncertainty, lenders typically take additional actions to ensure that there’s a first line of defense against delinquencies and payment stress. Expanding their focus to incorporate account review/portfolio management becomes particularly important. During this time, clients will be looking for leadership, early warning signs, and ways to recession-proof their portfolios (account management), while growing and maintaining their approvals in a healthy way (originations). Lenders may be well advised to delay any focus on collections, since many consumers may be facing major payment stress through no mismanagement of their own doing. Another critical component is with the rollout of government stimulus packages, which lenders can use to identify people in stress who could benefit for second chance opportunities they may not have otherwise been able to receive. As more consumers seek credit, from an analytics perspective, what considerations should financial institutions be making during this time?  SR: Financial institutions should be assessing and pre-identifying situations that might place consumers in positions of elevated financial stress. That way, organizations can implement solutions to identify and help at-risk consumers before they fall delinquent. The recent Coronavirus Aid, Relief, and Economic Security Act (CARES Act) – coupled with Experian’s score treatment, are designed to protect consumers against score declines during times of crisis. Furthermore, lenders can provide forbearance and loan deferment programs to help consumers.  For lenders, credit risk scores, models, and attributes are the best ways to identify – and even predict - delinquency risk. The FICO® Resilience Index can also identify consumers who are particularly susceptible to delinquency risk directly due to macroeconomic uncertainty. This gives lenders the opportunity to evaluate their portfolios for loss and connect with consumers who may be in need of further support. What is the smartest next play for financial institutions?  SR: For financial institutions, the smart play is to add alternative data into their data-driven decisioning strategies as much as possible. Alternative data works to enhance your ability to see a consumer’s entire credit portfolio, which gives lenders the confidence to continue to lend – as well as the ability to track and monitor a consumer’s historical performance (which is a good indicator of whether or not a consumer has both the intention and ability to repay a loan). How will the new attribute subset list benefit financial institutions during this time?   SR: Experian’s series of crisis attributes is an example of attributes that can be predictive in times of a crisis. These lists were designed to follow the 3 E’s – Expand, Enhance, and provide Ease of use. Enhance – With these attributes, lenders aren’t limited to traditional data. These attributes allow lenders to look at the entirety of a consumer’s credit or repayment behavior and use more data to make better lending decisions. This becomes crucial in a challenging environment. Expand – This data can also help lenders identify consumers who are in the market for products and services, even if there the lending criteria becomes more stringent. This can open doors and new opportunities for 40-50 million new customers, particularly ones that may not fit initial lending criteria. Ease of Use – Experian has put together the most predictive elements that can identify consumer resilience and potential financial stress in this challenging economy. Experian is committed to helping your organization during times of uncertainty. For more resources, visit our Look Ahead 2020 Hub. Learn more Shawn M. Rife, Director of Risk Scoring, Experian Consumer Information Services, North America Shawn Rife manages Experian’s credit risk scoring models, focused on empowering clients to maximize the scope and influence of their lending universe - while minimizing risk - and complying with ever-changing regulatory standards. Shawn also leads the implementation of Alternative Data within the lending environment, as well as key product implementation initiatives. Prior to Experian, Shawn held key consumer insights and predictive analytics roles for Consumer Packaged Goods and internet companies. Over his career, Shawn has focused on market segmentation, competitive research, new product development and consumer advocacy. He also holds a Master’s degree from Harvard University and a Bachelor’s degree in Political Science and Economics.

Retailers are already starting to display their Christmas decorations in stores and it’s only early November. Some might think they are putting the cart ahead of the horse, but as I see this happening, I’m reminded of the quote by the New York Yankee’s Yogi Berra who famously said, “It gets late early out there.” It may never be too early to get ready for the next big thing, especially when what’s coming might set the course for years to come. As 2019 comes to an end and we prepare for the excitement and challenges of a new decade, the same can be true for all of us working in the lending and credit space, especially when it comes to how we will approach the use of alternative data in the next decade. Over the last year, alternative data has been a hot topic of discussion. If you typed “alternative data and credit” into a Google search today, you would get more than 200 million results. That’s a lot of conversations, but while nearly everyone seems to be talking about alternative data, we may not have a clear view of how alternative data will be used in the credit economy. How we approach the use of alternative data in the coming decade is going to be one of the most important decisions the lending industry makes. Inaction is not an option, and the time for testing new approaches is starting to run out – as Yogi said, it’s getting late early. And here’s why: millennials. We already know that millennials tend to make up a significant percentage of consumers with so-called “thin-file” credit reports. They “grew up” during the Great Recession and that has had a profound impact on their financial behavior. Unlike their parents, they tend to have only one or two credit cards, they keep a majority of their savings in cash and, in general, they distrust financial institutions. However, they currently account for more than 21 percent of discretionary spend in the U.S. economy, and that percentage is going to expand exponentially in the coming decade. The recession fundamentally changed how lending happens, resulting in more regulation and a snowball effect of other economic challenges. As a result, millennials must work harder to catch up financially and are putting off major life milestones that past generations have historically done earlier in life, such as homeownership. They more often choose to rent and, while they pay their bills, rent and other factors such as utility and phone bill payments are traditionally not calculated in credit scores, ultimately leaving this generation thin-filed or worse, credit invisible. This is not a sustainable scenario as we enter the next decade. One of the biggest market dynamics we can expect to see over the next decade is consumer control. Consumers, especially millennials, want to be in the driver’s seat of their “credit journey” and play an active role in improving their financial situations. We are seeing a greater openness to providing data, which in turn enables lenders to make more informed decisions. This change is disrupting the status quo and bringing new, innovative solutions to the table. At Experian, we have been testing how advanced analytics and machine learning can help accelerate the use of alternative data in credit and lending decisions. And we continue to work to make the process of analyzing this data as simple as possible, making it available to all lenders in all verticals. To help credit invisible and thin-file consumers gain access to fair and affordable credit, we’ve recently announced Experian Lift, a new suite of credit score products that combines exclusive traditional credit, alternative credit and trended data assets to create a more holistic picture of consumer creditworthiness that will be available to lenders in early 2020. This new Experian credit score may improve access to credit for more than 40 million credit invisibles. There are more than 100 million consumers who are restricted by the traditional scoring methods used today. Experian Lift is another step in our commitment to helping improve financial health of consumers everywhere and empowers lenders to identify consumers who may otherwise be excluded from the traditional credit ecosystem. This isn’t just a trend in the United States. Brazil is using positive data to help drive financial inclusion, as are others around the world. As I said, it’s getting late early. Things are moving fast. Already we are seeing technology companies playing a bigger role in the push for alternative data – often powered by fintech startups. At the same time, there also has been a strong uptick in tech companies entering the banking space. Have you signed up for your Apple credit card yet? It will take all of 15 seconds to apply, and that’s expected to continue over the next decade. All of this is changing how the lending and credit industry must approach decision making, while also creating real-time frictionless experiences that empower the consumer. We saw this with the launch of Experian Boost earlier this year. The results speak for themselves: hundreds of thousands of previously thin-file consumers have seen their credit scores instantly increase. We have also empowered millions of consumers to get more control of their credit by using Experian Boost to contribute new, positive phone, cable and utility payment histories. Through Experian Boost, we’re empowering consumers to play an active role in building their credit histories. And, with Experian Lift, we’re empowering lenders to identify consumers who may otherwise be excluded from the traditional credit ecosystem. That’s game-changing. Disruptions like Experian Boost and newly announced Experian Lift are going to define the coming decade in credit and lending. Our industry needs to be ready because while it may seem early, it’s getting late.

Last month, Kenneth Blanco, Director of the Financial Crimes Enforcement Network, warned that cybercriminals are stealing data from fintech platforms to create synthetic identities and commit fraud. These actions, in turn, are alleged to be responsible for exploiting fintech platforms’ integration with other financial institutions, putting banks and consumers at risk. According to Blanco, “by using stolen data to create fraudulent accounts on fintech platforms, cybercriminals can exploit the platforms’ integration with various financial services to initiate seemingly legitimate financial activity while creating a degree of separation from traditional fraud detection efforts.” Fintech executives were quick to respond, and while agreeing that synthetic IDs are a problem, they pushed back on the notion that cybercriminals specifically target fintech platforms. Innovation and technology have indeed opened new doors of possibility for financial institutions, however, the question remains as to whether it has also created an opportunity for criminals to implement more sophisticated fraud strategies. Currently, there appears to be little evidence pointing to an acute vulnerability of fintech firms, but one thing can be said for certain: synthetic ID fraud is the fastest-growing financial crime in the United States. Perhaps, in part, because it can be difficult to detect. Synthetic ID is a type of fraud carried out by criminals that have created fictitious identities. Truly savvy fraudsters can make these identities nearly indistinguishable from real ones. According to Kathleen Peters, Experian’s SVP, Head of Fraud and Identity, it typically takes fraudsters 12 to 18 months to create and nurture a synthetic identity before it’s ready to “bust out” – the act of building a credit history with the intent of maxing out all available credit and eventually disappearing. These types of fraud attacks are concerning to any company’s bottom line. Experian’s 2019 Global Fraud and Identity Report further details the financial impact of fraud, noting that 55% of businesses globally reported an increase in fraud-related losses over the past 12 months. Given the significant risk factor, organizations across the board need to make meaningful investments in fraud prevention strategies. In many circumstances, the pace of fraud is so fast that by the time organizations implement solutions, the shelf life may already be old. To stay ahead of fraudsters, companies must be proactive about future-proofing their fraud strategies and toolkits. And the advantage that many fintech companies have is their aptitude for being nimble and propensity for early adoption. Experian can help too. Our Synthetic Fraud Risk Level Indicator helps both fintechs and traditional financial institutions in identifying applicants likely to be associated with a synthetic identity based on a complex set of relationships and account conditions over time. This indicator is now available in our credit report, allowing organizations to reduce exposure to identity fraud through early detection. To learn more about Experian’s Synthetic Fraud Risk Level Indicator click here, or visit experian.com/fintech.

As customer service continues its rapid shift to digital channels, consumer-finance companies have a powerful opportunity to engage customers and add value to the user experience. Credit education solutions can give customers valuable, personalized information and help lenders deliver relevant, prequalified credit offers that meet customers’ needs. The digital shift is well under way. The U.S. Consumer Financial Protection Bureau (CFPB), in its 2017 Consumer Credit Card Market Report, documents ongoing customer migration to digital platforms for every stage of the consumer interaction with creditors. In a survey of card lenders the CFPB characterizes as “mass market issuers,” which represent the majority of general-purpose and private-label credit cards issued in the U.S: In the past, mail and in-branch credit applications were the most popular conversion points for lenders, but today digital applications dominate, crushing direct mail as the biggest application generator. Beyond increasing customer acquisition and providing a channel for new applications, digital solutions are reshaping the entire consumer-finance process, creating a new end-to-end experience for banking consumers As consumers increasingly adopt digital channels for dealing with their finances, consumer finance companies face both a major opportunity and a significant challenge. Digital channels offer a powerful conduit for marketing additional products and services to customers, but fostering customer engagement with platforms can be tricky, as customer expectations are constantly evolving. The hallmark of digital channels is their convenience, which can be a double-edged sword for financial institutions. Quick, efficient digital services don’t give customers much reason to linger, and that can make it hard to create and act on cross-selling opportunities. So consumer finance companies that hope to boost engagement—and cross-sell opportunities—with their digital platforms must do so with valuable, compelling solutions—ideally interactive financial wellness tools that are personalized and highly relevant to the customer: Accenture, in its 2019 Global Financial Services Consumer Study, found significant majorities of consumers place high value on services including: Advice that is more relevant to personal circumstances Personalized services/ information that helps to reduce the risk of injury, loss, etc. Partnering with Experian, enables consumer-finance companies to provide customers with the kind of useful, high-value information customers want: Experian’s Credit Education services can help improve customers’ financial lives, Experian Identity Protection can help detect identity fraud and data theft. Experian’s credit-education services use customer credit data to help them set and track credit-improvement goals. Experian identity protection services can alert consumers immediately when suspicious activity is detected on their accounts (or in the names of their children) and can even help resolve cases of data abuse. The same access to credit data that powers Experian’s credit education services can help consumer-finance partners precision-target credit offers as their customers’ evolve in their needs and creditworthiness. Experian offers credit education and identity protection services as turnkey solutions, including fully hosted white-label platforms, hybrid options and APIs. Consumer-finance companies can quickly deploy these solutions, adapted to their own brand, to increase engagement and cross-sell opportunities and add meaningful value to the user experience. Learn more on our website

In today’s age of digital transformation, consumers have easy access to a variety of innovative financial products and services. From lending to payments to wealth management and more, there is no shortage in the breadth of financial products gaining popularity with consumers. But one market segment in particular – unsecured personal loans – has grown exceptionally fast. According to a recent Experian study, personal loan originations have increased 97% over the past four years, with fintech share rapidly increasing from 22.4% of total loans originated to 49.4%. Arguably, the rapid acceleration in personal loans is heavily driven by the rise in digital-first lending options, which have grown in popularity due to fintech challengers. Fintechs have earned their position in the market by leveraging data, advanced analytics and technology to disrupt existing financial models. Meanwhile, traditional financial institutions (FIs) have taken notice and are beginning to adopt some of the same methods and alternative credit approaches. With this evolution of technology fused with financial services, how are fintechs faring against traditional FIs? The below infographic uncovers industry trends and key metrics in unsecured personal installment loans: Still curious? Click here to download our latest eBook, which further uncovers emerging trends in personal loans through side-by-side comparisons of fintech and traditional FI market share, portfolio composition, customer profiles and more. Download now  

Today is National Fintech Day – a day that recognizes the ever-important role that fintech companies play in revolutionizing the customer experience and altering the financial services landscape. Fintech. The word itself has become synonymous with constant innovation, agile technology structures and being on the cusp of the future of finance. Fintech challengers are disrupting existing financial models by leveraging data, advanced analytics and technology – both inspiring traditional financial institutions in their digital transformation strategies and giving consumers access to a variety of innovative financial products and services. But to us at Experian, National Fintech Day means more than just financial disruption. National Fintech Day represents the partnerships we have carefully fostered with our fintech clients to drive financial inclusion for millions of people around the globe and provide consumers with greater control and more opportunities to access the quality credit they deserve. “We are actively seeking out unresolved problems and creating products and technologies that will help transform the way businesses operate and consumers thrive in our society. But we know we can’t do it alone,” said Experian North American CEO, Craig Boundy in a recent blog article on Experian’s fintech partnerships. “That’s why over the last year, we have built out an entire team of account executives and other support staff that are fully dedicated to developing and supporting partnerships with leading fintech companies. We’ve made significant strides that will help us pave the way for the next generation of lending while improving the financial health of people around the world.” At Experian, we understand the challenges fintechs face – and our real-world solutions help fintech clients stay ahead of constantly changing market conditions and demands. “Experian’s pace of innovation is very impressive – we are helping both lenders and consumers by delivering technological solutions that make the lending ecosystem more efficient,” said Experian Senior Account Executive Warren Linde. “Financial technology is arguably the most important type of tech out there, it is an honor to be a part of Experian’s fintech team and help to create a better tomorrow.” If you’d like to learn more about Experian’s fintech solutions, visit us at Experian.com/Fintech.

Earlier this month, Experian joined the nation’s largest community of online lenders at LendIt Fintech USA 2019 in San Francisco, CA to show over 5,000 attendees from 50 countries the ways consumer-permissioned data is changing the credit landscape. Experian Consumer Information Services Group President, Alex Lintner, and FICO Chief Executive Officer, Will Lansing, delivered a joint keynote on the topic of innovation around financial inclusion and credit access. The keynote addressed the analytical developments behind consumer-permissioned data and how it can be leveraged to responsibly and securely extend credit to more consumers. The session was moderated by personal finance expert, Lynnette Khalfani-Cox, from The Money Coach. “Consumer-permissioned data is not a new concept,” said Lintner. “All of us are on Facebook, Twitter, and LinkedIn. The information on these platforms is given by consumers. The way we are using consumer-permissioned data extends that concept to credit services.” During the keynote, both speakers highlighted recent company credit innovations. Lansing talked about UltraFICO™, a score that adds bank transaction data with consumer consent to recalibrate an existing FICO® Score, and Lintner discussed the newly launched Experian Boost™, a free, groundbreaking online platform that allows consumers to instantly boost their credit scores by adding telecommunications and utility bill payments to their credit file. “If a consumer feels that the information on their credit files is not complete and that they are not represented holistically as an applicant for a loan, then they can contribute their own data by giving access to tradelines, such as utility and cell phone payments,” explained Lintner. There are approximately 100 million people in America who do not have access to fair credit, because they are subprime, have thin credit files, or have no lending history. Subprime consumers will spend an additional $200,000 over their lifetime on the average loan portfolio. Credit innovations, such as Experian Boost and UltraFICO not only give consumers greater control and access to quality credit, but also expand the population that lenders can responsibly serve while providing a differentiated and competitive advantage. “Every day, our data is used in one million credit decisions; 350 million per year,” said Lintner. “When our data is being used, it represents the consumers’ credit reputation. It needs to be accurate, it needs to be timely and it needs to be complete.” Following the keynote, Experian, FICO, Finicity and Deserve joined forces in a breakout panel to dive deeper into the concept of consumer-permissioned data. Panel speakers included Greg Wright, Chief Product Officer at Experian’s Consumer Information Services; Dave Shellenberger, Vice President of Product Management at FICO; Nick Thomas, Co-Founder, President and Chief Technology Officer at Finicity, and Kalpesh Kapadia, Chief Executive Officer at Deserve. “As Alex described in today’s keynote, consumer-permissioned data is not a new concept,” said Greg Wright. “The difference here is that Experian, FICO and Finicity are applying this concept to credit services, working together to bring consumer-permissioned data to mass scale, so that lenders can reach more people while taking on less risk.” For an inside look at Experian and FICO’s joint keynote, watch the video below, or visit Experian.com and boost your own credit score.

The concept of the credit card was originally envisioned by utopian novelist Edmond Bellamy in 1887 in his utopian novel “Looking Backward.” And ever since the first credit card was introduced almost 70 years ago, people have been absolutely crazy for them. The average American has roughly three of them in her wallet, each with an average balance of $6354 ($1841 for retail cards). Total US credit card debt tipped over $1 trillion in 2017 and continues to climb at around 5% a year. With all of that consumer enthusiasm, you’d be right to assume that it’s a fantastic business to be in. But the credit card industry of today is nothing if not competitive and, with literally thousands of credit card products out there, it’s exceptionally hard to stand out. Our wallets are overflowing with cards and our mailboxes are awash with card offers, yet few people could explain the differences between them. In addition, the industry has lost ground to an ever-proliferating list of alternative payment methods, including mobile peer-to-peer payment services and prepaid debit cards. Furthermore, the advent of big data and alternative underwriting models could allow some tech upstarts to refinance balances at lower interest rates – especially if they’re willing to accept slightly lower returns than credit card companies have become accustomed to. So while the industry as a whole appears to be quite healthy, it’s clear that in order to differentiate credit card companies need to be more innovative than they are today. And the first step towards coming up with new, innovative ideas is acknowledging your vulnerabilities. Six vulnerabilities in the credit card industry Credit card companies face threats on many sides, making it hard to know where to start initiating change. Here are some of the top vulnerabilities that face the credit card industry today. 1. Retailers are starting to balk at high fees In 2016, Costco concluded its exclusive partnership with American Express in favor of Visa and Citibank. While that transition was painful at times, analysts from BMO Capital Markets estimated that switch would save the retailer between $110 million and $220 million in interchange fees. Later that year, Walmart Canada announced that it intended to stop accepting Visa credit cards in its 400 stores, citing high transaction fees. The two companies resolved the dispute after six months, and neither company disclosed the new terms. But it wouldn’t be the last time it happened. Foods Co., a California-based Kroger family company, stopped accepting Visa credit cards in its 21 stores and five gas stations in August 2018 over a fee dispute. Its parent company stated that it’s considering following suit. When large retailers stop accepting certain payment networks or changing their preferred payment network over fee disputes, it’s not just the payment networks that suffer. Credit card issuers also miss out when their cardholders can no longer use certain cards at their favorite retailer. 2. Fintech companies competing for loyalty Fintech companies are providing many services that credit cardholders can’t always get with their card issuer. Some, for example, provide credit monitoring services that help consumers build or rebuild their credit. Other fintech companies are using alternative and trended credit data in their underwriting process. Earnest, for example, not only checks applicants’ credit scores but also looks at savings patterns, investment balances, and employment growth potential. Fannie Mae, the largest source of funding for mortgage lenders, began using trended credit data, which provides a deeper look at a borrower’s credit history, for single-family mortgage applications in 2016. By using alternative and trended credit data to evaluate prospective borrowers, these and other companies can find new customer markets and achieve more predictive decisions than the traditional way of measuring risk. 3. Mobile payment services bypassing credit card companies Apple Pay, Samsung Pay and Google Pay make it easier and safer for cardholders to use their credit cards when shopping online and at retail stores. That said, these services could start using their own payment infrastructure in the future, bypassing credit cards entirely. Peer-to-peer mobile payment services including PayPal, Venmo and Square, already do this. In fact, they charge a fee for credit card payments, which effectively forces most users to use a debit card or checking account instead. 4. Increased use of debit cards undercuts credit cards Consumers made 73.8 billion payments with a debit card in 2016, according to the Federal Reserve, with a value of $2.7 trillion. That’s roughly three times the volume and value of debit card payments a decade earlier. During that same time, the volume and value of credit card payments increased by closer to 1.5 times. While that’s still an upward trend, debit cards use is gaining more steam. Younger consumers are likely driving this trend toward debit instead of credit. A study conducted by Harris Poll recently found that Millennials carry fewer credit cards than older generations and appear far more debt warry. Also, according to a TD Bank survey, Millennials spend more than twice as much using cash, debit cards and checks than the average American. Some banks including Discover and American Express, have begun offering cash-back rewards to their debit and prepaid debit cardholders. These rewards programs may start to catch on with other banks, making debit cards a reasonable alternative to credit card holders who prefer debit but don’t want to miss out on cash back. 5. Challenger brands are targeting underserved customers Many major credit card issuers focus more on the prime and near-prime market, opening up the way for challenger brands to capture market share among consumers who are new to credit or looking to rebuild. Deserve, for instance, has raised more than $78 million to provide a credit card to international students with no Social Security number requirement. It also offers an unsecured credit card designed for consumers with no credit history. Another example is Petal, which has raised close to $17 million from investors to provide a no-fee, unsecured credit card to help consumers build credit — all with no credit score requirement. 6. A persistent lack of security in credit card transactions Credit card fraud was the most common form of identity theft reported to the Federal Trade Commission in 2017, according to a report by Experian. And while credit card companies have made strides to prevent fraudsters from accessing credit card information, perpetrators are getting smarter and more sophisticated, making it hard for card issuers to keep up. With consumer credit card debt rapidly growing and APR’s on the rise, the current credit card boon simply can’t last forever. The market will eventually shrink and a game of “Survivor” will ensue. So it would be wise for credit card companies to take stock of their vulnerabilities now and start getting ahead of the pack. Visit our website for more information on identity protection products you can offer your customers.

Millions of Americans placed a credit freeze or restricted access to their credit file in recent months to keep identity thieves at bay. Credit freezes keep any new creditors from seeing a consumer’s credit file, which makes it nearly impossible for hackers to open new accounts fraudulently. But a credit freeze can also be problematic for consumers when they are finally ready to consider new credit products and loans.  We’ve heard from credit unions and other lenders about sharing best practices to help streamline the process for consumers who want to permanently or temporarily lift the freeze to apply for a legitimate line of credit. Following are the three ways to help clients with a frozen Experian report quickly and efficiently allow access. Unfreeze account: This will remove the freeze entirely from the consumer’s credit report so that it may be accessed with the consumer’s permission. To do this, the consumer will need to contact Experian online, by phone or mail and provide his unique personal identification number (PIN) code—provided when the consumer froze his account—to un-freeze the report. Thaw account: An action that will temporarily remove the freeze for a timeframe determined by the consumer. The consumer should contact Experian online, by phone, or mail and provide his unique PIN code to thaw the report. Grant a creditor one-time access: A consumer may provide a different/temporary PIN to a lender to access the report just once. The PIN can be emailed to the consumer, presented on screen if the consumer is online, or provided on the phone or by mail. Typically, a consumer’s request to thaw or un-freeze his credit file online or by phone will thaw or un-freeze the file within minutes. Download Checklist Experian can be reached: Online: www.experian.com/freeze Phone: 888-397-3742 Mail: P.O. Box 9554, Allen, Texas 75013 Remember, if a consumer has a frozen credit file with all three credit reporting agencies, he will need to contact each agency to enable access to his report.

In 2017, a meaningful jump in consumer sentiment bolstered spending, and caused the spread between disposable personal income and consumer spending to reach an all-time high. This increase in spread was mostly financed through consumer debt, which according to the Federal Reserve Bank of New York has brought total consumer debt to a new peak of $12.8 Trillion surpassing the prior peak in 2008. The Experian eighth annual State of Credit report greatly supported the consumer behavior trends observed for the past year. Spanning the generations  It is no surprise that generation Z (the “Great Recession Generation”) is conservative and prudent in their approach to credit because they are the most familiar with the post financial crisis economy. Results showed Millennials experienced a drop in overall debt, and an increase in mortgage debt reflects the national homeownership affordability challenge facing this generation. As first time homebuyers, millennials have to relatively tighten their spending as they dedicate an ever-growing portion of their income to housing. On the other end of the spectrum, the results of the study showed that Baby Boomers’ had sizable debt (including mortgage debt), which reflects the generation’s intent to stay active in their communities and in their homes much longer than prior generations have done. A recent Harvard study reported that by 2035, one out of three American households will be headed by an individual 65 years of age or older, compared to current ratio of one out of five households. What’s on the horizon? It is reasonable to assume that these trends may continue into 2018, as the underlying conditions continue to persist. A closer eye should be kept on student and auto loans due to the significant increase in portfolio size and increasing default rates compare to other debt.   Editor’s note: This post was written by Fadel N. Lawandy, Director of the C. Larry Hoag Center for Real Estate and Finance and the Janes Financial Center at the George L. Argyros School of Business and Economics, Chapman University. Fadel joined the George L. Argyors School of Business and Economics, Chapman University after retiring as a Portfolio Manager from Morgan Stanly Smith Barney in 2009. He has two decades of experience in the financial industry with banking, credit management, commercial/residential real estate acquisition and financing, corporate finance, mergers and acquisitions, quantitative and qualitative analysis and research, and portfolio management. Fadel currently serves as the Chairman of the Board and President of CFA Society Orange County, and is an active member of the CFA Institute.

Traditional credit attributes provide immense value for lenders when making decisions, but when used alone, they are limited to capturing credit behavior during a single moment of time. To add a deeper layer of insight, Experian® today unveiled new trended attributes, aimed at giving lenders a wider view into consumer credit behavior and patterns over time. Ultimately, this helps them expand into new risk segments and better tailor credit offers to meet consumer needs. An Experian analysis shows that custom models developed using Trended 3DTM attributes provide up to a 7 percent lift in predictive performance when compared with models developed using traditional attributes only. “While trended data has been shown to provide additional insight into a consumer’s credit behavior, lack of standardization across different providers has made it a challenge to gain those insights,” said Steve Platt, Experian’s Group President of Decision Analytics and Data Quality. “Trended 3D makes it easy for our clients to get value from trended data in a consistent manner, so they can make more informed decisions across the credit life cycle and, more importantly, give consumers better access to lending options.” Experian’s Trended 3D attributes help lenders unlock valuable insights hidden within credit reports. For example, two people may have similar balances, utilization and risk scores, but their paths to that point may be substantially different. The solution synthesizes a 24-month history of five key credit report fields — balance, credit limit or original loan amount, scheduled payment amount, actual payment amount and last payment date. Lenders can gain insight into: Changes in balances over time Migration patterns from one tradeline or multiple tradelines to another Variations in utilization and credit limits Changes in payment activity and collections Balance transfer and debt consolidation behavior Behavior patterns of revolving trades versus transactional trades Additionally, Trended 3D leverages machine learning techniques to evaluate behavioral data and recognize patterns that previously may have gone undetected. To learn more information about Experian’s Trended 3D attributes, click here.

Good job, check. Shared interests, check. Chemistry, check. He seems like a perfect 10. Both of you enjoy your first date and while getting ready for the second, you dare to imagine that turning into another and another, and possibly happily ever after. Then one decidedly unromantic question comes to mind: What is his credit score? Reviewing a potential partner’s credit score and report is important to many singles who are looking for lasting love. According to Bankrate.com, 42 percent of Millennials said that knowing someone’s credit score would affect their desire to date them, slightly more than 40 percent of Gen Xers and 41 percent of Baby Boomers. They may be on to something. Research shows that knowing someone’s credit history and sense of financial responsibility could save people time – and potential heartache. A UCLA study about money and love shows a very strong link between high credit scores and long-lasting relationships. People with drastically different credit scores may experience more financial stress down the road, placing a burden on a relationship. An Experian report reveals 60 percent of people believe it’s important for their future spouse to have a good credit score, and 25 percent of people from the UCLA study were willing to leave a partner with poor credit before marriage so they aren’t held back. While that three-digit number doesn't tell a person’s whole financial story, it can reveal financial habits that could impact your life. Banks are wary of making loans to borrowers with tarnished scores, typically 660 and below. A low score could quash dreams of buying a home, and result in steep interest rates, up to 29 percent, for credit cards, car financing and other unsecured loans. A mid-range credit score can also hurt an application for an apartment and drive up the cost of mobile phone plans and auto insurance. Eight states have passed laws limiting employers’ ability to use credit checks when assessing job candidates, yet 13 percent of employers surveyed by the Society of Human Resource Management performed credit checks on all job applicants. Talking spending styles and revealing credit scores sooner rather than later in a relationship isn’t necessarily comfortable. But it may help you decide whether you have compatible financial outlooks and practices.

Following a full year of steady improvement, small-business credit conditions stumbled during the first quarter of 2014.

Small-business credit conditions wrapped up the year by showing continued improvement for the fourth consecutive quarter.