All posts by Guest Contributor
CFPB and credit invisibles A recent study by the Consumer Financial Protection Bureau (CFPB) found that American consumers establish credit differently depending on their economic background. The study revealed that: Consumers in lower-income areas are 240% more likely to become credit visible due to negative information, such as a debt in collection. Those in higher-income areas become credit visible in a more positive way. For example, these consumers are 30% more likely to become credit visible through the use of a credit card. The percentage of consumers transitioning to credit visibility due to student loans more than doubled in the last 10 years. Policymakers can make it easier for consumers to become more credit visible by clearly defining the term alternative data and supporting the use of alternative data sources that meet legal and societal standards for accuracy, validity, predictability and fairness. Learn more >
1 in 10 Americans are living paycheck to paycheck Financial health means more than just having a great credit score or money in a savings account. It includes being able to manage daily finances, save for the future and weather a financial shock. Here are some facts about Americans’ financial health: 46% of Americans are struggling financially. Roughly 31% of nonretired adults have no retirement savings or pension. Approximately 50% are unprepared for a financial emergency, and about 1 in 5 have no savings set aside to cover unexpected emergencies. It’s never too late for people to achieve financial health. By providing education on money management, you can drive new opportunities for increased engagement, loyalty and long-term revenue streams. Why financial health matters >
A combination of mass identity data compromise and the increasing abilities of organized fraud rings has created a synthetic identity epidemic that is impacting all markets. Here are the three ways that synthetic identities are generally created: Credit applications and inquiries that result in synthetic credit profile creation or build. Exploitation of the authorized user process designed to take over or piggyback on legitimate credit profiles. Data furnishing schemes that falsify regular credit reporting agency updates. When it comes to fighting synthetic fraud, we all need to be a part of the solution – or we are just a part of the problem. Mitigate synthetic identity fraud >
There’s a new crew coming of age. Enter Generation Z. Gen Z — those born between the mid-1990s and the early 2000s — makes up one-quarter of the U.S. population. By 2020, they’ll account for 40% of all consumers. The oldest members of this next cohort — 18- to 20-year-olds — are coming of age. Here are some insights on how this initial segment of Gen Z is beginning to use credit. Credit scores averaged 631 in 2016. Debt levels — consisting largely of bankcards and auto and student loans — are low, with an average debt-to-income ratio of just 5.7%. Average income is $33,800. Total annual plastic spend is about $9,500, slightly more than that of younger millennials. This generation is being raised in an era of instant, always-on access. They expect a quick, seamless and customized mobile experience. You have just 8 seconds to capture their attention. Webinar: A First Look at Gen Z and Credit
The State of Credit Unions 2017 In the financial services universe, there is no shortage of players battling for consumer attention and share of wallet. Here’s a look at how one player — credit unions — has fared over the past two years compared to banks and online lenders: Personal loans grew 2%, but online lenders and finance companies still own 51% of this market. Card originations at credit unions increased 18%, with total credit limits on newly originated cards approaching $100 billion in Q1 2017. Mortgage market share rose 7% for credit unions, while banks lost share to online lenders. Auto originations increased 25% for credit unions to 1.93 million accounts in Q1 2017. Whether your organization is a credit union, a financial institution or an online lender, a “service first” mentality is essential for success in this highly competitive market. The State of Credit Unions 2017
Mitigating synthetic identities Synthetic identity fraud is an epidemic that does more than negatively affect portfolio performance. It can hurt your reputation as a trusted organization. Here is our suggested 4-pronged approach that will help you mitigate this type of fraud: Identify how much you could lose or are losing today to synthetic fraud. Review and analyze your identity screening operational processes and procedures. Incorporate data, analytics and cutting-edge tools to enable fraud detection through consumer authentication. Analyze your portfolio data quality as reported to credit reporting agencies. Reduce synthetic identity fraud losses through a multi-layer methodology design that combats both the rise in synthetic identity creation and use in fraud schemes. Mitigating synthetic identity fraud>
Summer spending A study by Experian and Edelman Berland noted that travelers relied heavily on credit for vacation purchases last year — with many planning to charge more than half of their vacation expenses this summer. Of those surveyed about their 2015 summer purchases: 86% spent money on a summer vacation in 2015. $2,275 was spent per person, with $1,308 of that being credit card purchases. 35% hadn’t saved in advance. 61% spent more than they planned. Summer brings vacations and credit card use. By identifying consumer credit trends like these, you can target new customers and identify balance transfer opportunities. Learn more>
Analyzing credit scores and card balances According to a study by VantageScore® Solutions LLC, consumers with credit scores between 601 and 650 carry the largest credit card bills, at more than $10,000 — nearly 2x that of the average consumer. Other key findings include: Those with the highest scores have the largest total credit limit ($46,735), compared with just $2,816 for those with the lowest scores. The average credit card holder has $29,197 in credit lines, with an average balance of $5,720. Those with scores between 701 and 750 use an average of 27% of their available credit versus 47% for those with scores between 651 and 700. The study reinforces the importance of staying current on the latest credit trends to best identify areas of opportunity and adjust lending strategies accordingly. Make better decisions >
Identity theft is frustrating. Not just for people, but for businesses too. According to our recent survey, many Americans are unknowingly engaging in risky behaviors online. Some of the insights that cause concern include: U.S. adults have large digital footprints, storing an average of 3.4 types of personally identifiable information (PII) online. Half don’t think they’re likely to ever experience identity theft because they believe poor credit makes them unappealing targets. A quarter have shared their credit card number or PIN with friends and family. When fraudsters capture your customers’ PII, it impacts them as well as your business. That’s just one of many reasons why you should be helping your customers protect their information. PII security tips for your customers >
Experian’s ID Fraud Tracker, a quarterly analysis of fraud rates across consumer financial products, found that British families who are struggling financially — about 4 million people — are increasingly becoming prime targets of financial fraud. The research performed on data from 2014 to 2016 in the United Kingdom also revealed: There has been a 203% increase in the total number of fraudulent credit applications over the past two years. Current account, credit card and loan fraud were the most common types of credit products fraudsters applied for in other people’s names, making up 94% of the total. 35% of all third-party fraud came from households with high salaries and large disposable incomes. Fraud’s increasing around the world. We all have a responsibility to be vigilant and take measures to protect our business and customers, online and offline. Protect your customers >
Credit reports provide a wealth of information. But did you know credit attributes are the key to extracting critical intelligence from each credit report? Adding attributes into your decisioning enables you to: Improve acquisition strategies and implement policy rules with precision. Segment your scored population for more refined risk assessment. Design more enticing offers and increase book rates. Attributes can help you make more informed decisions by providing a more granular picture of the consumer. And that can make all the difference when it comes to smart lending decisions. Video: Making better decisions with credit attributes
Although the average mortgage rate was more than 4% at the end of the first quarter*, Q1 mortgage originations were nearly $450 billion — a 5% increase over the $427 billion a year earlier. As prime homebuying season kicks off, lenders can stay ahead of the competition by using advanced analytics to target the right customers and increase profitability. Revamp your mortgage and HELOC acquisitions strategies>
During our recent webinar, Detect and Prevent: The current state of e-commerce fraud, Julie Conroy, Aite Group research director, shared 5 key trends relating to online fraud: Rising account takeover fraud. Targeting of loyalty points. Growing global transactions. Frustrating false declines. Increasingly mobile consumers. Fraud is increasing. Be prepared. Protect your business and customers with a multilayered approach to fraud prevention. For more trends and predictions, watch the webinar recording.
Data is the cornerstone of retail success today. Yet only 39% of retailers trust their data when making important business decisions. Your organization — whether retail or not — can start depending on your data and gain actionable insights with these data management tips: Put the right people in place. Get the tools you need. Enrich your data. Collect accurate customer information Arranging for the right people, tools and processes to maintain accurate information helps you stay on top of your data now and lets you leverage that data to stay ahead of the curve. Learn more tips>
With the recent switch to EMV and more than 4.2 billion records exposed by data breaches last year*, attackers are migrating their fraud attempts to the card-not-present channel. Our recent analysis found the following states to be the riskiest for e-commerce fraud in 2016. Delaware Oregon Florida New York Nevada Attackers are extremely creative, motivated, and often connected. Prevent e-commerce fraud by protecting all of your customer contact points. Fraud Heat Map>
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