Every prospecting list needs to be filtered by your organizations specific credit risk threshold. Whether you’re developing a campaign targeting super-prime, sub-prime, or consumers who fall somewhere in between, an effective credit risk model needs to do two things: 1) accurately represent a consumer’s risk level and 2) expand the scoreable population. The newly redeveloped VantageScore® credit score does both. With the VantageScore® credit score, you get a scoring model that’s calibrated to post-recession consumer behavior, as well the ability to score nearly 35 million additional consumers – consumers who are typically excluded from most marketing lists because they are invisible to older legacy models. Nearly a third of those newly-scoreable consumers are near-prime and prime. However, if your market is emerging to sub-prime consumers – you’ve found the mother-load!
Delinquency isn’t the only risk to contend with. Bankruptcies can mean high losses for your organization at any risk level. Traditional credit risk models are not calibrated to specifically look for behavior that predicts future bankruptcies. Experian’s Bankruptcy PLUS filters out high bankruptcy risk from your list. Using Bankruptcy PLUS you’re able to bring down your overall risk while removing as few people as possible.
My next post looks into ways to identify profitable consumers in your list.
For more see: Four steps to creating the ideal prospecting list.
