Power of the PrescreenUtilizing Credit Bureau Data for Effective Loan Growth

LKCS

Why Use Credit Data?

• Prequalify potential borrowers based on your unique credit requirements

• Focus on the target audience most likely to respond

• Eliminate unlikely or high-risk prospects

• Increases response rates

• Lowers mailing costs

Acquire, Cross-Sell, and Retain

• Acquisition– Identify credit-qualified prospective borrowers in the

communities you serve• Cross-Sell

– Append credit data to your existing account holder lists for specific loan offers based on credit worthiness, credit history, and current loans

• Retention– Capture loan business that you have been losing to

your competitors

Available Credit Data

• HUNDREDS of data fields available• Customized criteria for each loan campaign• General Credit Attributes

– FICO score, bankruptcies, repossessions, late payment history (30 and 90 day lates), collections, etc.

• Demographic Attributes– Income, age, gender, length of residence, presence

of children, ethnicity, lifestyle segmentation, vehicle affinity, and others

Available Credit Data – Auto Loan Campaigns

– Extend new loan or refinance offers

Most Common Auto Attributes Include:Total balance on open trades Balance to credit ratio

Months remaining on open trades

High balance of vehicle trades

Number of open vehicle trades Monthly payment on most recent vehicle trade

Number of vehicle trades Monthly payment on oldest trade

Age of most recent auto trade Payment savings calculation

Estimated auto loan rate

NOTE: “Trades” can be loans or leases. LKCS has the capability to distinguish between both types of trades.

Auto Campaign Ideas

• New Auto Loan Campaign– Based on general credit worthiness– Option to look for people with history of open auto loans but no

current open auto trades– Personalize with vehicle affinity, age, gender demographics

• Auto Loan Recapture/Refinance– Set criteria such as minimum loan balance, number of months

remaining, estimated rate or potential payment savings, etc.

• Lease Expiration Offer– New loan offer for people with auto leases coming due within

next 6 months

Available Credit Data – Mortgage Campaigns

– Extend new mortgage, home equity, or refinance offers

Most Common Mortgage Attributes Include:Combined mortgage balance

Number of mortgage trades

Mortgage rate type

Home equity aggregate balance for open trades

30/60/90 days late in the last 30 days/12 months/24 months

Home equity open status trades

Mortgage aggregate balance for open trades

Mortgage date Combined Loan to AVM Value

Mortgage highest balance Mortgage loan type Fannie Owned/Freddie Owned

Age of most recent mortgage trade

Mortgage rate Reverse mortgage suppress

Age of most recent mortgage inquiry

Mortgage length of term Savings calculations

Mortgage Campaign Ideas

• Mortgage Refinance• New Mortgage Loan• Home Equity Debt Consolidation• Home Equity Loan / Line of Credit Offer• First Time Home Buyer Offer• HARP Campaign

Available Credit Data – Credit Card Campaigns

– Extend new loan and/or balance transfer offers

Most Common Credit Card Attributes Include:Combined Debt(Choose from aggregatebalances on auto trades, home equity trades, installment trades, and/or bank and retail card trades)

Aggregate balance to credit ratio for open revolving trades

Aggregate balance for open revolving trades

Ratio of satisfactory to open trades

Aggregate credit for open revolving trades

Credit Card Campaign Ideas

• New Credit Card Loan– Promote different card versions based on individual credit

attributes, lifestyles/ages, etc.

• Balance Transfer Campaign

General Recommendations

• Use the credit data to PRE-SCREEN

– You are not making a loan decision…

– Limit selections to a few credit criteria to maximize opportunities.

– Recipients will have to complete a full application and meet all of your lending requirements even if you tell them they are “pre-approved”.

• Follow Up

– Send more than one mailing or follow up with e-mails and/or personal phone calls for maximum effectiveness.

General Recommendations (continued)

• Combine Offers– Send different offers to different groups of potential borrowers

based on what the bureaus know about them.

– Make each offer as relevant as possible to each recipient.

– For example, run the following campaigns together:• First time home buyer’s campaign• Mortgage refinance campaign (based on potential payment

savings)• Home equity debt consolidation campaign• General home equity loan offer

– This will maximize your return and minimize your costs.

Credit Bureau Data

• Purchasing Data Directly from the Credit Bureaus

• All Three Bureaus

– LKCS has relationships that enable us to provide data from any or all of the three major bureaus.

– Not all bureaus have information on all people – it is important to source data from multiple bureaus.

– Up to 70% increase in leads when pulling data from three bureaus as opposed to one.

– No additional cost to obtain data from multiple bureaus.

Using Credit Data

• Specify Your Lending Guidelines– Only market to prospects and account holders meeting

your specific credit criteria (ie – FICO Score, LTV, Credit History, etc.).

• Firm Offers of Credit– Credit data can only be used when you are extending

credit offers.

– Must be compliant with the Fair Credit Reporting Act.

– LKCS helps with this!

Firm Offers of Credit

• When using Credit Bureau data, marketing materials must include:– Indications that the recipient is pre-selected, pre-

screened, or pre-approved .

– Terms and conditions; eligibility requirements.

• Including why credit may not be extended after all.

– Minimum dollar amount for which the recipient has been qualified.

– Opt-out notice and disclosure.– You must extend an offer of credit for each record

purchased.

Auto Campaign Direct Mail Samples

Credit Card Direct Mail Campaigns

Mortgage / Home Equity Direct Mail

E-Mail Offers

DataFlex Credit Alerting

• LKCS can provide daily alerts for account holders or prospects that have had hard credit inquiries for mortgages, auto loans, credit cards, etc.

• Specify credit, demographic and geographic criteria.

• Leads are pre-screened against your credit criteria for each loan offer.

• Use for account holder retention OR acquisition.

Credit-Based Alerts

• Here’s What Happens:

– When your account holder (or a prospect in your geographic area) applies for credit ANYWHERE, an inquiry is posted to his or her credit file.

– These inquiries are categorized according to the type of financial product the account holder is seeking: mortgage, auto loan, or credit card.

– A “lead” is generated each time there is a match with the credit file.

• Respond with a firm offer of credit or insurance immediately after receiving the lead.

Credit-Based Alerts (cont.)

• Select which category(ies) of inquiry(ies) you wish to target

• Leads are then pre-screened using your qualification criteria

– Criteria can be based on numerous attributes including credit score, debt load, etc.

• Daily alerts from Equifax, TransUnion and Experian!

– LKCS provides you with a list of all leads and fulfills any direct mail and/or e-mail offers on the same day.

What’s the Cost?

• Credit Prospecting– Pricing depends on several factors including:

• Number of records purchased

• Demographic selects purchased

• Credit bureau minimum charges

– FREE List Counts and Estimates

• LKCS will run counts at no charge to determine feasibility and cost of your next pre-screen marketing campaign.

What’s the Cost?

• Credit Alerting– Based on number of account holders and/or prospects

screened each month

– FREE Opportunity Analysis

• We will review your account holder credit activity over the past 30 days and provide you with the following data: credit activity by inquiry type, state and credit bureau, as well as qualification rates using your specific qualification criteria!

Credit Alerting ROI Calculator

• See how Credit Alerting can pay for itself for your institution:

http://lkcs.co/calcroi

Thank You!

Sid HaasVice President of Business Development

Direct: 815-220-3904E-Mail: sid.haas@lk-cs.com

www.lk-cs.com