Instant credit now available

by JOHN SAUNDERS

E ach year, the retail credit market in the UK grows by about 12%, and substantially more in the

clothing and electrical sectors. At the beginn~g of 1984, Club 24, a UK retail fmance company in Leeds set itself a number of objectives to take fuller advantage of this increasing demand for instant credit. Central to Club 24’s strategy was a redesign of its credit granting system.

The company was operating a manual system of credit scoring This meant that retail clients, operating inhouse credit schemes, telephoned Leeds to relay customer information contained in credit application forms. A manual credit scoring check would then be made to assess creditworthi- ness. Apart from the lengthy assess- ments, which belied the term ‘instant credit’, the calculations incurred an unavoidable degree of human error. Also, only the final credit decisions were recorded, so errors were almost impossible to trace.

Redesigned package

Since September 1984, Club 24 has operated a new system called Auto- score, which now handles about

42 0011~84~85/050042~2$03.00 @ 1985 Butterworth & Co (Publishers) Ltd. data processing

12000 credit enquiries a week. The system is supplied by a credit refer- ence agency, CCN Systems in Notting- ham, UK and enables the company to improve its credit scoring operation.

Autoscore calculates the credit score, carries out a credit reference search and then makes the credit decision, based on Club 24’s specified criteria. The company’s terminals ~o~unicate directly with the CCN mainframe computer using a dedi- cated line.

Autoscore allows Club 24 to in- crease the speed and efficiency of

applications

Autoscore is now handling 12000 credit enquiries evety week.

telephoned credit applications. The normal enquiry time is now under two minutes so the retailer’s customer can remain in the store whilst his/her application is being processed. The CCN computer undertakes all the calculations and the whole credit operation now create:s much less paperwork. The new system also alerts the operator if any part of the input date is absent or defective. Modifications to the scoring criteria,

such as a change to the cutoff score, can then be made the same day.

‘Possibly the most influential factor behind our decision to use the CCN

package was the assurance at the outset that Autoscore would be tailor- made to meet our specifications’, says Mike Burrows, Club 24 director and credit controller. ‘CCN provided the skeleton core package to which we added a number of modifications to purpose-build the Club 24 system, which we are now operating with great success.’

Tracking reports

In the future, one of the system’s most important benefits to Club 24 will be the growing database of appli-

cation information produced as a re- sult of the scoring operation. This provides the daily tracking reports for monitoring the performance of the scoring system and will be the basis for the development of second and third generation scoring systems.

Tracking reports enable Club 24 to monitor daily the efficiency and pro- ductivity of the department and in-

dividual operators, as well as to study applicant information itself. This might mean, for example:

calculating the average credit scores,

making retailer comparisons, determining the number and reasons behind any ‘overides’ (where an application has been referred), finding out the most popular methods of payment.

Club 24 deals with a number of different retail outlets and Autoscore is programmed to select the appro- priate score card for the purpose. For instance, specifications will be differ- ent for a person applying for credit to buy a new suit and someone requiring

a television set or video. The CCN system will also check each enquirer’s name and address against official Post Office records, and will identify any outstanding credit.

‘In the few months since installa- tion, the system has more than paid for itself in the prevention of fraud alone,’ says Mike Burrows. ‘We can now easily spot duplicate applica-

tions, where a customer tries to run up a substantial bill on credit in more than one of our clients’ outlets with no intention of paying.

‘As business expands, so the de- mands on the system increase. Club

24 is currently ‘owed’ well over &lOOM and Autoscore has given us the capacity to handle a greatly in- creased volume of new credit applica- tions.’

Club 24 wants to maintain its share of the retail credit finance manner. A computerized system has taken the tedium out of credit application

assessment and offers a growing data- base for performance monitoring of the scoring system. 0

CCN Systems Ltd, Talbot House, Talbot St, Nottingham NGI 5HF, UK

~0127 no 5 june 1985 43