Despite low demand and a shrinking pool of qualified candidates, loan growth priorities continue to rank high for most small-business lenders – both for small to midsize banks and large financial institutions. Between 2006 and 2010, overall loan applications were down 5 percent where large financial institutions saw small-business loan applications rise 36.5 percent. Banks and credit unions with assets less than $500 million showed the most significant increase of 65 percent. Read more of the blog series: "Getting back in the game – Generating small business applications." Source: Decision Analytics' Blog: Relationship and Transactional Lending Best Practices

Last month, I wrote about seeking ways to ensure growth without increasing risk.  This month, I’ll present a few approaches that use multiple scores to give a more complete view into a consumer’s true profile. Let’s start with bankruptcy scores. You use a risk score to capture traditional risk, but bankruptcy behavior is significantly different from a consumer profile perspective. We’ve seen a tremendous amount of bankruptcy activity in the market. Despite the fact that filings were slightly lower than 2010 volume, bankruptcies remain a serious threat with over 1.3 million consumer filings in 2011; a number that is projected for 2012.  Factoring in a bankruptcy score over a traditional risk score, allows better visibility into consumers who may be “balance loading”, but not necessarily going delinquent, on their accounts. By looking at both aspects of risk, layering scores can identify consumers who may look good from a traditional credit score, but are poised to file bankruptcy. This way, a lender can keep their approval rates up and lower risk of overall dollar losses. Layering scores can be used in other areas of the customer life cycle as well. For example, as new lending starts to heat up in markets like Auto and Bankcard, adding a next generation response score to a risk score in your prospecting campaigns, can translate into a very clear definition of the population you want to target. By combining a prospecting score with a risk score to find credit worthy consumers who are most likely to open, you help mitigate the traditional inverse relationship between open rates and credit worthiness. Target the population that is worth your precious prospecting resources. Next time, we’ll look at other analytics that help complete our view of consumer risk. In the meantime, let me know what scoring topics are on your mind.

The strongest growth in new bankcard accounts is occurring in the near-prime and subprime segments of VantageScore® credit score C, D and F. Year-over-year (Q1 2011 over Q1 2010) growth rates of 20 percent, 46 percent and 53 percent were observed for each of the respective tiers. Listen to our recent webinar featuring bankcard credit trends Source: Experian-Oliver Wyman Market Intelligence Reports

Despite low demand and a shrinking pool of qualified candidates, loan growth priorities continue to rank high for most small-business lenders – both for small to midsize banks and large financial institutions. Between 2006 and 2010, overall loan applications were down 5 percent where large financial institutions saw small-business loan applications rise 36.5 percent. Banks and credit unions with assets less than $500 million showed the most significant increase of 65 percent. Read more of the blog series: "Getting back in the game – Generating small business applications." Source: Decision Analytics' Blog: Relationship and Transactional Lending Best Practices

Last month, I wrote about seeking ways to ensure growth without increasing risk.  This month, I’ll present a few approaches that use multiple scores to give a more complete view into a consumer’s true profile. Let’s start with bankruptcy scores. You use a risk score to capture traditional risk, but bankruptcy behavior is significantly different from a consumer profile perspective. We’ve seen a tremendous amount of bankruptcy activity in the market. Despite the fact that filings were slightly lower than 2010 volume, bankruptcies remain a serious threat with over 1.3 million consumer filings in 2011; a number that is projected for 2012.  Factoring in a bankruptcy score over a traditional risk score, allows better visibility into consumers who may be “balance loading”, but not necessarily going delinquent, on their accounts. By looking at both aspects of risk, layering scores can identify consumers who may look good from a traditional credit score, but are poised to file bankruptcy. This way, a lender can keep their approval rates up and lower risk of overall dollar losses. Layering scores can be used in other areas of the customer life cycle as well. For example, as new lending starts to heat up in markets like Auto and Bankcard, adding a next generation response score to a risk score in your prospecting campaigns, can translate into a very clear definition of the population you want to target. By combining a prospecting score with a risk score to find credit worthy consumers who are most likely to open, you help mitigate the traditional inverse relationship between open rates and credit worthiness. Target the population that is worth your precious prospecting resources. Next time, we’ll look at other analytics that help complete our view of consumer risk. In the meantime, let me know what scoring topics are on your mind.

The strongest growth in new bankcard accounts is occurring in the near-prime and subprime segments of VantageScore® credit score C, D and F. Year-over-year (Q1 2011 over Q1 2010) growth rates of 20 percent, 46 percent and 53 percent were observed for each of the respective tiers. Listen to our recent webinar featuring bankcard credit trends Source: Experian-Oliver Wyman Market Intelligence Reports