vision 2014: improving your approval and account management strategies using trended risk stability...
DESCRIPTION
Learn how you can improve your approval and risk-management strategies by incorporating trended risk stability data. We will show you how valuable a summarized 18-month credit history can be and how it can complement your acquisition and portfolio management strategies. We also will review case studies to illustrate how lenders are leveraging this data in the bankcard and retail space.TRANSCRIPT
© 2014 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc.
Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in
any form or manner without the prior written permission of Experian. Experian Public.
Improving your approval and account management strategies using trended risk stability data
Lori Dietrich Experian
Kelley Motley Experian
#vision2014
2 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
How do I expand my marketable universe?
How can I differentiate risk at the margins?
Who do I want to retain?
Are there leading indicators for risk?
Does past score performance predict future score behavior?
3 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Tracking score changes over time
800
700
600
500 Jan Feb Mar Apr Dec May Jun Jul Aug Sep Oct Nov
Mary Stable
Bob Possible stress
Sue Improving
Three people. One score. Three different ways they got there.
4 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Do past credit-scores or changes in credit score influence the current risk?
We have seen some evidence that changes in score can differentiate credit-risk
Historical credit-risk scores Relationship between score change and bad rate
VantageScore®
band Overall Bad Rate
Stable –
bad rate Score increase –
bad rate Score decrease-
bad rate
<500 55.89% 43.48% 35.42% 62.03%
500-600 22.93% 17.67% 16.22% 29.18%
601-660 6.44% 5.42% 5.83% 8.38%
661-780 1.20% 1.05% 1.08% 1.65%
>=781 0.16% 0.16% 0.16% 0.18%
5 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Do past credit-scores or changes in credit score influence the current risk?
We have seen some evidence that changes in score can differentiate credit-risk
Historical credit-risk scores Relationship between score change and bad rate
VantageScore®
band Overall Bad Rate
Stable –
bad rate Score increase –
bad rate Score decrease-
bad rate
<500 55.89% 43.48% 35.42% 62.03%
500-600 22.93% 17.67% 16.22% 29.18%
601-660 6.44% 5.42% 5.83% 8.38%
661-780 1.20% 1.05% 1.08% 1.65%
>=781 0.16% 0.16% 0.16% 0.18%
6 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Do past credit-scores or changes in credit score influence the current risk?
We have seen some evidence that changes in score can differentiate credit-risk
Historical credit-risk scores Relationship between score change and bad rate
VantageScore®
band Overall Bad Rate
Stable –
bad rate Score increase –
bad rate Score decrease-
bad rate
<500 55.89% 43.48% 35.42% 62.03%
500-600 22.93% 17.67% 16.22% 29.18%
601-660 6.44% 5.42% 5.83% 8.38%
661-780 1.20% 1.05% 1.08% 1.65%
>=781 0.16% 0.16% 0.16% 0.18%
7 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Do past credit-scores or changes in credit score influence the current risk?
We have seen some evidence that changes in score can differentiate credit-risk
Historical credit-risk scores Relationship between score change and bad rate
VantageScore®
band Overall Bad Rate
Stable –
bad rate Score increase –
bad rate Score decrease-
bad rate
<500 55.89% 43.48% 35.42% 62.03%
500-600 22.93% 17.67% 16.22% 29.18%
601-660 6.44% 5.42% 5.83% 8.38%
661-780 1.20% 1.05% 1.08% 1.65%
>=781 0.16% 0.16% 0.16% 0.18%
8 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Why can’t historical scores / attributes be used in FCRA products?
Disputes
► Information used for decisioning must be displayable and disputable on a current credit report
► When a consumer successfully disputes their credit score, Experian makes the correction in File OneSM and all future scores will be corrected
Time limitations
► Historical scores may include data outside the seven-year window
● Example: A score computed three years ago may take into account a bankruptcy that happened nine or ten years ago
Historical credit-risk scores Historical scores and the FCRA
8
However, we do have a source of historical,
FCRA compliant credit information: trended data
9 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Historical scores calculated using trade line trended data
Definitions:
► Bads: 90 DPD+ on random trade within 12 months
► Goods: 0 or 30 DPD on random trade within 12 months
Output
► Four Indices – Stability over time
► Optional – 18 monthly historical scores
● Historical risk score is scaled 300-850
Risk Stability IndexSM
KS
VantageScore® 68.49
Historical Score 61.90
Using trended data that is displayable on a current consumer credit report, Experian has created a Risk Stability IndexSM
0
0.05
0.1
0.15
0.2
0.25
0.3
300 400 500 600 700 800 900 1000
Vantage Historical Score
10 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Index 1 – 18 month difference
a. Large negative change (>= 60 points)
b. Moderate negative change (20-59 points)
c. Stable (+/- 19 points)
d. Moderate positive change (20-59 points)
e. Large positive change (>= 60 points)
Index 2 – 12 month difference (same as above)
Index 3 – 6 month difference (same as above)
Risk Stability IndexSM output options
11 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Risk Stability IndexSM output options
Index 4 – Average change in score for 18 months
a. Very stable – 0 to 10 points
b. Stable – 11 to 20 points
c. Moderately unstable –
21 to 30 points
d. Unstable – 31 to 40 points
e. Severely unstable – 41 or
more points
Optional, 18 monthly historical scores
12 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Lenders can factor in historical score changes to their segmentation where consumers have similar scores
Identify less risky consumers to target or retain based on stability of risk score over time
Suppress more risky consumers for marketing or upsell offers
Risk Stability IndexSM How lenders can use
13 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Trended risk stability
case studies
Kelley Motley
14 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Objective:
What does trended (historical) score data provide that my current score isn’t capturing?
How does Risk Stability IndexSM compliment a risk score for acquisition and portfolio management?
Overview:
Two populations matched to Experian’s credit archive in order to append and evaluate Experian’s Risk Stability IndexSM
► Retail – portfolio management
► Bankcard – new account acquisition
Analysis objective and overview
15 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Performance window and definitions Retail portfolio management
Starting population (4M records)
December 2013 December 2012 December 2011
12 -month performance window 12 -month risk stability index
Observation point
Performance definitions:
Bad 90+ days past due
Good No worse than 30 days past due
Indeterminate 31-89 days past due
16 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
The risk score provides good separation and ranking of bad accounts
Baseline model performance Retail portfolio management
VantageScore®
Range
Total number of
consumers Total bad consumers Bad rate
820-839 429,744 365 0.08%
809-819 372,718 350 0.09%
792-808 410,676 663 0.16%
767-791 392,742 1,109 0.28%
739-766 400,426 1,900 0.47%
710-738 401,885 3,614 0.90%
676-709 407,650 7,042 1.73%
644-675 399,549 13,653 3.42%
600-643 396,948 28,195 7.10%
300-599 395,507 95,616 24.18%
17 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Risk stability in addition to risk score adds value
Risk Stability IndexSM overlay to risk score Retail portfolio management
VantageScore®
Range
Total number of
consumers Total bad consumers Bad rate
644-675 399,549 13,653 3.42%
Overlay risk stability
Large
negative
change
36,056
Bad rate 5.61%
Moderate
negative
change
67,494
Bad rate 3.45%
Stable
179,536
Bad rate
3.01%
Risk Stability IndexSM provides bad rate separation of 3.0% -5.61%
Moderate
positive
change
75,848
Bad rate 3.17%
Large
positive
change
40,615
Bad rate 3.70%
18 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Evaluating risk stability in addition to risk score
Risk Stability IndexSM overlay to risk score Retail portfolio management
VantageScore® 12-Month Risk Index Overlay
Number of Consumers
Score
Range
Number of
Consumers
Large neg.
Change
Moderate
neg. Change Stable
Moderate pos.
Change
Large positive
change
820-839 429,744 9,492 40,541 329,035 41,879 8,797
809-819 372,718 9,881 37,803 263,727 48,973 12,334
792-808 410,676 13,229 45,878 264,592 66,591 20,386
767-791 392,742 16,685 50,472 225,405 71,547 28,633
739-766 400,426 22,247 57,392 198,796 82,381 39,610
710-738 401,885 28,550 65,162 182,333 83,980 41,860
676-709 407,650 32,630 67,942 182,373 82,643 42,062
644-675 399,549 36,056 67,494 179,536 75,848 40,615
600-643 396,948 52,871 70,647 169,536 64,386 39,508
300-599 395,507 132,268 75,651 110,380 46,909 30,299
19 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Risk stability in addition to risk score adds value
Risk Stability IndexSM overlay to risk score Retail portfolio management
VantageScore® 12-Month Risk Index Overlay
Bad Rate
Score
Range
Bad
Rate
Large neg.
Change
Moderate
neg. Change Stable
Moderate pos.
Change
Large positive
change
820-839 0.08% 0.07% 0.09% 0.08% 0.10% 0.13%
809-819 0.09% 0.08% 0.10% 0.10% 0.06% 0.11%
792-808 0.16% 0.23% 0.13% 0.16% 0.14% 0.22%
767-791 0.28% 0.49% 0.26% 0.27% 0.27% 0.35%
739-766 0.47% 0.77% 0.46% 0.45% 0.42% 0.56%
710-738 0.90% 1.63% 0.84% 0.86% 0.80% 0.88%
676-709 1.73% 3.10% 1.64% 1.60% 1.48% 1.85%
644-675 3.42% 5.61% 3.45% 3.01% 3.17% 3.70%
600-643 7.10% 11.43% 7.66% 5.86% 6.41% 6.77%
300-599 24.18% 36.05% 23.23% 17.00% 15.98% 13.52%
20 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Risk stability in addition to risk score adds value
Risk Stability IndexSM overlay to risk score Retail portfolio management
VantageScore® 12-Month Risk Index Overlay
Bad Rate
Score
Range
Bad
Rate
Large neg.
Change
Moderate
neg. Change Stable
Moderate pos.
Change
Large positive
change
820-839 0.08% 0.07% 0.09% 0.08% 0.10% 0.13%
809-819 0.09% 0.08% 0.10% 0.10% 0.06% 0.11%
792-808 0.16% 0.23% 0.13% 0.16% 0.14% 0.22%
767-791 0.28% 0.49% 0.26% 0.27% 0.27% 0.35%
739-766 0.47% 0.77% 0.46% 0.45% 0.42% 0.56%
710-738 0.90% 1.63% 0.84% 0.86% 0.80% 0.88%
676-709 1.73% 3.10% 1.64% 1.60% 1.48% 1.85%
644-675 3.42% 5.61% 3.45% 3.01% 3.17% 3.70%
600-643 7.10% 11.43% 7.66% 5.86% 6.41% 6.77%
300-599 24.18% 36.05% 23.23% 17.00% 15.98% 13.52%
21 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Risk stability in addition to risk score adds value
Risk Stability IndexSM overlay to risk score Retail portfolio management
VantageScore® 12 Month Risk Index Overlay
Bad Rate
Score
Range
Bad
Rate
Large neg.
Change
Moderate
neg. Change Stable
Moderate pos.
Change
Large positive
change
820-839 0.08% 0.07% 0.09% 0.08% 0.10% 0.13%
809-819 0.09% 0.08% 0.10% 0.10% 0.06% 0.11%
792-808 0.16% 0.23% 0.13% 0.16% 0.14% 0.22%
767-791 0.28% 0.49% 0.26% 0.27% 0.27% 0.35%
739-766 0.47% 0.77% 0.46% 0.45% 0.42% 0.56%
710-738 0.90% 1.63% 0.84% 0.86% 0.80% 0.88%
676-709 1.73% 3.10% 1.64% 1.60% 1.48% 1.85%
644-675 3.42% 5.61% 3.45% 3.01% 3.17% 3.70%
600-643 7.10% 11.43% 7.66% 5.86% 6.41% 6.77%
300-599 24.18% 36.05% 23.23% 17.00% 15.98% 13.52%
22 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Risk Stability IndexSM overlay to risk score Retail portfolio management
VantageScore® 12-Month Risk Index Overlay
Bad Rate
Score
Range
Bad
Rate
Large neg.
Change
Moderate
neg. Change Stable
Moderate pos.
Change
Large positive
change
820-839 0.08% 0.07% 0.09% 0.08% 0.10% 0.13%
809-819 0.09% 0.08% 0.10% 0.10% 0.06% 0.11%
792-808 0.16% 0.23% 0.13% 0.16% 0.14% 0.22%
767-791 0.28% 0.49% 0.26% 0.27% 0.27% 0.35%
739-766 0.47% 0.77% 0.46% 0.45% 0.42% 0.56%
710-738 0.90% 1.63% 0.84% 0.86% 0.80% 0.88%
676-709 1.73% 3.10% 1.64% 1.60% 1.48% 1.85%
644-675 3.42% 5.61% 3.45% 3.01% 3.17% 3.70%
600-643 7.10% 11.43% 7.66% 5.86% 6.41% 6.77%
300-599 24.18% 36.05% 23.23% 17.00% 15.98% 13.52%
Extend a line increase or cross-sell offer to 3.2M consumers falling below the 4% bad rate threshold using both Risk Stability IndexSM and VantageScore®
23 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
0%
10%
20%
30%
40%
1 2 3 4 5 6 7 8 9 10
Inte
rva
l b
ad
ra
te
Decile
Overall Bad Rate Stable Large Negative Change
Interval bad rates Retail portfolio management
0.0%
1.0%
2.0%
3.0%
4.0%
4 5 6 7
Best scoring Worst scoring
24 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Starting population (359K records)
December 2013 December
2012 December 2011
Jan. – Mar. 2013
New Trade Open 9-11 month
performance
window
12 -month risk stability index
Performance window and definitions Bankcard new account acquisition
Observation point
Performance definitions:
Bad 90+ days past due
Good No worse than 30 days past due
Indeterminate 31-89 days past due
25 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
The risk score provides good separation and ranking of bad accounts
Baseline model performance Bankcard new account acquisition
VantageScore®
Range
Total number of
consumers Total bad consumers Bad rate
816-839 38,245 36 0.09%
801-815 35,444 38 0.11%
782-800 34,518 64 0.19%
758-781 35,713 104 0.29%
735-757 36,943 162 0.44%
712-734 35,482 228 0.64%
685-711 35,430 404 1.14%
656-684 35,480 685 1.93%
615-655 36,121 1,472 4.08%
333-614 35,516 4,881 13.74%
26 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Risk Stability IndexSM overlay to risk score Bankcard new account acquisition
VantageScore®
Range
Total number of
consumers Total bad consumers Bad rate
656-684 35,480 685 1.93%
Overlay risk stability
Large
negative
change
2,718
Bad rate 2.10%
Moderate
negative
change
5,758
Bad rate 2.10%
Stable
15,137
Bad rate
2.06%
Risk Stability IndexSM provides bad rate separation of 1.62% - 2.10%
Moderate
positive
change
7,673
Bad rate 1.62%
Large
positive
change
4,194
Bad rate 1.69%
Risk stability in addition to risk score adds value
27 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Risk Stability IndexSM overlay to risk score Bankcard new account acquisition
VantageScore® 12-Month Risk Index Overlay
Number of Consumers
Score
Range
Number of
Consumers
Large neg.
Change
Moderate neg.
Change Stable
Moderate pos.
Change
Large positive
change
816-839 38,245 769 4,637 27,771 4,157 911
801-815 35,444 955 4,312 23,624 5,168 1,385
782-800 34,518 1,230 4,639 20,757 5,842 2,050
758-781 35,713 1,599 5,095 18,860 7,123 3,036
735-757 36,943 2,048 5,482 16,803 8,395 4,215
712-734 35,482 2,471 5,724 15,151 7,892 4,244
685-711 35,430 2,658 6,068 14,702 7,817 4,185
656-684 35,480 2,718 5,758 15,137 7,673 4,194
615-655 36,121 3,183 6,080 15,705 7,049 4,104
333-614 35,516 5,130 6,483 13,867 5,794 4,242
Evaluating risk stability in addition to risk score
28 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Risk stability in addition to risk score adds value
Risk Stability IndexSM overlay to risk score Bankcard new account acquisition
VantageScore® 12-Month Risk Index Overlay
Bad Rate
Score
Range
Bad
Rate
Large neg.
Change
Moderate neg.
Change Stable
Moderate pos.
Change
Large positive
change
816-839 0.09% 0.00% 0.19% 0.07% 0.10% 0.44%
801-815 0.11% 0.21% 0.21% 0.09% 0.04% 0.22%
782-800 0.19% 0.24% 0.09% 0.17% 0.21% 0.49%
758-781 0.29% 0.75% 0.31% 0.24% 0.25% 0.43%
735-757 0.44% 0.49% 0.49% 0.45% 0.42% 0.36%
712-734 0.64% 0.65% 0.65% 0.63% 0.58% 0.80%
685-711 1.14% 1.39% 1.05% 1.10% 1.11% 1.29%
656-684 1.93% 2.10% 2.10% 2.06% 1.62% 1.69%
615-655 4.08% 4.24% 4.14% 4.18% 3.70% 4.07%
333-614 13.74% 16.16% 14.22% 13.79% 12.46% 11.69%
29 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Risk stability in addition to risk score adds value
Risk Stability IndexSM overlay to risk score Bankcard new account acquisition
VantageScore® 12-Month Risk Index Overlay
Bad Rate
Score
Range
Bad
Rate
Large neg.
Change
Moderate neg.
Change Stable
Moderate pos.
Change
Large positive
change
816-839 0.09% 0.00% 0.19% 0.07% 0.10% 0.44%
801-815 0.11% 0.21% 0.21% 0.09% 0.04% 0.22%
782-800 0.19% 0.24% 0.09% 0.17% 0.21% 0.49%
758-781 0.29% 0.75% 0.31% 0.24% 0.25% 0.43%
735-757 0.44% 0.49% 0.49% 0.45% 0.42% 0.36%
712-734 0.64% 0.65% 0.65% 0.63% 0.58% 0.80%
685-711 1.14% 1.39% 1.05% 1.10% 1.11% 1.29%
656-684 1.93% 2.10% 2.10% 2.06% 1.62% 1.69%
615-655 4.08% 4.24% 4.14% 4.18% 3.70% 4.07%
333-614 13.74% 16.16% 14.22% 13.79% 12.46% 11.69%
30 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Risk stability in addition to risk score adds value
Risk Stability IndexSM overlay to risk score Bankcard new account acquisition
VantageScore® 12-Month Risk Index Overlay
Bad Rate
Score
Range
Bad
Rate
Large neg.
Change
Moderate neg.
Change Stable
Moderate pos.
Change
Large positive
change
816-839 0.09% 0.00% 0.19% 0.07% 0.10% 0.44%
801-815 0.11% 0.21% 0.21% 0.09% 0.04% 0.22%
782-800 0.19% 0.24% 0.09% 0.17% 0.21% 0.49%
758-781 0.29% 0.75% 0.31% 0.24% 0.25% 0.43%
735-757 0.44% 0.49% 0.49% 0.45% 0.42% 0.36%
712-734 0.64% 0.65% 0.65% 0.63% 0.58% 0.80%
685-711 1.14% 1.39% 1.05% 1.10% 1.11% 1.29%
656-684 1.93% 2.10% 2.10% 2.06% 1.62% 1.69%
615-655 4.08% 4.24% 4.14% 4.18% 3.70% 4.07%
333-614 13.74% 16.16% 14.22% 13.79% 12.46% 11.69%
31 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Approve 264,000 consumers falling below the 2% bad rate threshold using both Risk Stability IndexSM and VantageScore®
Risk Stability IndexSM overlay to risk score Bankcard new account acquisition
VantageScore® 12 Month Risk Index Overlay
Bad Rate
Score
Range
Bad
Rate
Large neg.
Change
Moderate neg.
Change Stable
Moderate pos.
Change
Large positive
change
816-839 0.09% 0.00% 0.19% 0.07% 0.10% 0.44%
801-815 0.11% 0.21% 0.21% 0.09% 0.04% 0.22%
782-800 0.19% 0.24% 0.09% 0.17% 0.21% 0.49%
758-781 0.29% 0.75% 0.31% 0.24% 0.25% 0.43%
735-757 0.44% 0.49% 0.49% 0.45% 0.42% 0.36%
712-734 0.64% 0.65% 0.65% 0.63% 0.58% 0.80%
685-711 1.14% 1.39% 1.05% 1.10% 1.11% 1.29%
656-684 1.93% 2.10% 2.10% 2.06% 1.62% 1.69%
615-655 4.08% 4.24% 4.14% 4.18% 3.70% 4.07%
333-614 13.74% 16.16% 14.22% 13.79% 12.46% 11.69%
32 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Starting population (838K records)
December 2013 Dec.
2012 June 2011
12 month
performance
window
Performance window and definitions Bankcard Prospecting
Observation point
Performance definitions: All trade performance
Bad 90+ days past due
Good No worse than 30 days past due
Indeterminate 31-89 days past due
18 -month risk stability
average score change
Oct.
2012
Mar.
2013
Population with a bankcard inquiry from Oct. – Dec. 2012 with no new open bankcard trade
between Oct. 2012 and Mar. 2013
33 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Risk Stability IndexSM overlay to risk score Refining prospecting strategy – bankcard
VantageScore® Average Score Change Across 18 Monthly Scores Overlay
Number of Consumers
Score
Range
Number of
Consumers
Very
Stable Stable
Moderately
Unstable Unstable
Severely
Unstable
700-839 340,067 92,485 116,698 66,288 34,411 30,185
680-699 51,909 8,282 15,599 12,581 8,219 7,228
670-679 28,410 4,807 8,226 6,671 4,656 4,050
660-669 30,703 5,362 8,669 7,322 5,109 4,241
650-659 31,894 5,577 8,947 7,446 5,435 4,489
640-649 32,263 5,846 8,843 7,335 5,620 4,619
630-639 30,102 5,518 8,039 6,683 5,459 4,403
620-629 27,458 5,036 7,006 6,144 5,093 4,179
610-619 25,801 4,685 6,317 5,600 5,086 4,113
600-609 24,729 4,325 5,592 5,524 4,988 4,300
Evaluating risk stability in addition to risk score
34 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Risk Stability IndexSM overlay to risk score Refining prospecting strategy – bankcard
VantageScore® Average Score Change Across 18 Monthly Scores Overlay
Bad Rate
Score
Range
Bad
Rate
Very
Stable Stable
Moderately
Unstable Unstable
Severely
Unstable
700-839 1.15% 0.88% 1.00% 1.27% 1.70% 1.65%
680-699 3.97% 3.43% 3.37% 4.01% 4.81% 4.84%
670-679 5.19% 4.74% 4.28% 4.93% 6.06% 6.99%
660-669 6.26% 5.46% 5.56% 5.89% 7.67% 7.66%
650-659 7.56% 6.28% 6.12% 7.78% 8.78% 10.16%
640-649 8.84% 7.46% 7.31% 9.18% 10.12% 11.45%
630-639 10.11% 7.70% 8.42% 10.06% 12.38% 13.49%
620-629 12.16% 7.96% 10.05% 12.53% 15.33% 16.37%
610-619 14.19% 9.93% 11.54% 15.41% 16.81% 18.21%
600-609 16.64% 12.18% 13.89% 17.49% 19.05% 20.84%
Risk stability in addition to risk score adds value
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Risk Stability IndexSM overlay to risk score Refining prospecting strategy – bankcard
VantageScore® Average Score Change Across 18 Monthly Scores Overlay
Bad Rate
Score
Range
Bad
Rate
Very
Stable Stable
Moderately
Unstable Unstable
Severely
Unstable
700-839 1.15% 0.88% 1.00% 1.27% 1.70% 1.65%
680-699 3.97% 3.43% 3.37% 4.01% 4.81% 4.84%
670-679 5.19% 4.74% 4.28% 4.93% 6.06% 6.99%
660-669 6.26% 5.46% 5.56% 5.89% 7.67% 7.66%
650-659 7.56% 6.28% 6.12% 7.78% 8.78% 10.16%
640-649 8.84% 7.46% 7.31% 9.18% 10.12% 11.45%
630-639 10.11% 7.70% 8.42% 10.06% 12.38% 13.49%
620-629 12.16% 7.96% 10.05% 12.53% 15.33% 16.37%
610-619 14.19% 9.93% 11.54% 15.41% 16.81% 18.21%
600-609 16.64% 12.18% 13.89% 17.49% 19.05% 20.84%
Risk stability in addition to risk score adds value
36 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Risk stability can add value to a current risk score
► Acquisition
► Portfolio management
Risk stability can be implemented using the Risk Stability IndexSM or you can drill into the more detailed 18 months of scores
Findings
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