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Experian Tool Tracks Changes in Consumer Credit Profiles

Experian has launched a new tool dubbed Credit Migration Solutions to make it easier for mortgage institutions to prospect, manage their portfolio and handle collections.

The product allows the user to analyze the credit behavior of customers and prospects to make acquisition, portfolio management and collections decisions. This new capability can be used throughout the customer life cycle to alert credit grantors to changes in a consumer's credit profile.

Specifically, by comparing credit behavior between two points in time, Credit Migration Solutions reveals how consumers are performing and how their credit profiles are evolving. The application signals when consumers meet predetermined thresholds for credit scores and attributes, such as changes in balances, utilization or delinquency behaviors.

Experian developed this tool so that by using this information, companies can target new customers, retain and expand relationships with current customers, and minimize risk exposure with others - all at the appropriate time.

The three main components of the product include having the ability to target prospects when they migrate into a credit grantor's lending criteria to increase response and approval rates for pre-approved credit offers. Prescreen Data Migration monitors and compares how a consumer's credit behavior changes, informing companies when prospects move into predetermined thresholds. This enables responsive marketing based on timely knowledge.

Second, the application eases portfolio management by identifying significant changes in customers' credit profiles, which affect how companies manage risk, retention and cross-sell opportunities. Portfolio Data Migration delivers batch results that provide targeted information on customers based on predefined thresholds for account review. Portfolio Migration Triggers can be integrated into an already existing daily triggers program to strengthen and expand customer relationships while creating the ability to spot credit problems before they impact profits.

Lastly, there are collections functionality built in. The ability to identify changes in debtors' credit scores, balances, credit utilization and contact information is vital for knowing when positive changes signal a good time to resume collection efforts. Collections Data Migration delivers batch results, allowing customers to review portfolios for significant migration events on a recurring basis.

"Our clients are excited about the opportunity to use sophisticated analytics without having to burden themselves in-house or ship it out to a third party with all the breaches going on," said Tim Summers, vice president of product management and development at Experian. "The user can look at two points in time using our relational database and we'll do all the heavy lifting from there.

"For example, there are hundreds of attributes that you can change and we'll run that against their selection. On a weekly, monthly and quarterly basis we'll output migration data for those attributes. You can take the attributes individually or combine them or establish them as a band.

"For example, for prescreening there may be some people that are close but don't meet our criteria right now," said Mr. Summers. "We can run data on those people weekly or monthly to automatically alert the client when that borrower does meet their criteria. Also, they can track credit degradation on a weekly basis as well. This will allow lenders to make better decisions with better data, without having to do it in house or ship it out to a third-party service.

"There is also a collection component so if someone is looking at a portfolio and some of their attempts at debt have been dormant they can get data attributes to see if clients might have a better chance of paying that off in the future," he said.

The product has been in beta testing for the past month and is now ready for industry use. "We're giving our clients the ability to apply Experian's analytics," said Mr. Summers. "There is a fee per migration event. If they wanted one million names they'd pay based on an agreed upon fee.

"We have some large lenders looking at the product now determining their criteria for migration," he said. "We also have small clients looking to leverage the stuff that only the big guys can get. The big guys see this as a significant advantage and the smaller guys have an opportunity to step it up and compete."

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