What the Bureaus Don't Want You to Know

Tips to Leverage Credit Bureau Data to Acquire Loans from New and Existing Account Holders

LKCS

Credit Prospecting Campaigns

• Credit Prospecting or Credit Pre-Screen Campaigns– Use credit bureau data to identify potential borrowers that

meet your INITIAL lending criteria.

– Market to prospects or existing account holders with specific demographic and credit-based traits.

– Can be broad reaching or pinpoint specific.

– Use for any type of loan – mortgage loans, home equity/HELOCs, auto loans, credit cards, or consumer loans.

• Unfortunately, no commercial lending data is available

About Pre-Screen Campaigns

• What they are:– PRE-screen campaigns using a group of credit

characteristics to target qualified individuals.

• What they are not:– There are no guaranteed approvals. Borrowers will still need

to APPLY and meet ALL of your underwriting criteria.

– Even when you tell a recipient that they are “pre-approved”.

Credit Prospecting Campaigns

• Extend pre-approved offers of credit to account holders and non-account holders based on actual credit score information.

– Set criteria to identify recipients that will qualify for a loan offer based on your specific pre-screen requirements.

– Send direct mail loan offers, e-mail offers, statement-based campaigns and make outbound phone calls to qualified account holder and non-account holder prospects.

– And, you can utilize LKCS’ DataFlex reporting engine to measure the results of these campaigns!

Credit Prospecting Campaign Examples

• Leverage credit data to generate loans.• These are just a few EXAMPLES.

– Be creative – brainstorm campaigns that make sense for your institution.

• ADJUST as needed.– Adjust the credit parameters, etc. as needed to fit your

lending guidelines and goals.

Potential Campaigns – AUTO REFIS

• Loan Payoff– Fico Scores 640+– Exclude auto lates/repo’s– 2-3 years left on their

loan– Minimum $XX savings on

monthly payment

• Lease Expirations– Fico Scores 640+ – Exclude auto lates/repo’s– 1-3 months left on their

lease

Potential Campaigns – MORTGAGE REFIS

• Conventional– Fico Scores 680-720 (or to

750 if possible)– Mortgage Balance $100K+ – No FHA/VA/reverse

mortgages– Age of loan 13-72 months– Minimum $XXX savings on

monthly payment

• Home Equity Refi(1st position)– Fico Scores 680-720 (or to

750 if possible)– Mortgage balance below

$150K– Less than 50% LTV– No 30-day lates in last 12

months

Potential Campaigns – CREDIT CARDS

• Balance Transfers– Fico Scores 650-720– Existing retail/credit card

debt over $5,000– No 30-day lates in last 12

months– No bankruptcies– No collections in last 24

months

Sample Campaigns

• The Offers:

First Time HomeBuyers Offer– Sent to Renters– Qualified by FICO

Score and other credit parameters

Revolving Debt Reduction Offer– Sent to

Homeowner’s– Available equity

over $xx,000– Revolving debt

over $xx,000– Qualified by FICO

Score and other credit parameters

Home Equity Offer– Sent to

Homeowner’s without YOUR Home Equity Loan/LOC

– Available equity over $xx,000

– Qualified by FICO Score and other credit parameters

Sample Campaigns

• Direct Mailer

First-Time Home Buyers Offer

Sample Campaigns

• Personalized Letter or Statement Cover Letter

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Off

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Sample Campaigns

• E-Mail Marketing

Fir

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Ho

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Buy

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Off

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Home Equity Offer

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, pre-qualified, or pre-approved .

– Terms and conditions; eligibility requirements.

• Including why credit may not be extended after all. (Remember, potential borrowers still go through your full application and approval process)

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

– Opt-out notice and disclosure.

Obtaining Credit Bureau Data

• Two options:

1. Purchase data from one or more of the credit bureaus directly

2. Purchase data from a 3rd party such as LKCS

Why would you purchase the credit bureaus’ data from a 3rd party?

THAT’S WHAT THEY DON’T WANT YOU TO KNOW!

Reason #1: Better Customer Service

• The credit bureaus primarily want to work directly with the largest financial institutions.

– This is not the case at LKCS. We look forward to working with you: large, small or in-between.

• Counts and estimates often take several days (at best) to get back from the bureaus.

– LKCS utilizes an online interface to query data from the bureaus. We can run most counts and estimates in minutes.

• LKCS speaks in plain English.

– We explain and walk you through the process without complicated jargon or cryptic regulations.

#2: Campaign Development & Fulfillment

• One call does it all!

– We do more than sell credit data.

– LKCS has in-house design, printing, mailing, and web services.

– All campaigns are custom designed. LKCS does not make you select a template.

– So we can write and design the campaign materials and then print/mail any direct mail campaigns and send any e-mail messages.

– We have lots of experience with pre-screen campaigns. We ensure your materials meet all FCRA requirements and get them approved for you by the credit bureaus.

Reason #3: Results Reporting

• We’ll stick around after the sale

– Marketing departments need to measure Return on Investment. And LKCS can help.

– We can work with you after the campaign ends to help you measure exactly how many new loans you closed as a result of your pre-screen campaign, who opened them, and the loan balances obtained.

– Then, we’ll help you tweak and refine your next campaign to hopefully do even better.

Reason #4: Better Data Availability

• Tri-Bureau Sourcing

– Credit data is private information. And the credit bureaus don’t share it with just anyone. In fact, they don’t even share it amongst each other.

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

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

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

– There is no additional cost to obtain data from multiple bureaus.

Reason #4: Better Data Availability (continued)

• Demographics, Real Estate, and Specialized Datasets

– LKCS layers non-credit datasets with the credit bureau data to create a very unique compilation of available criteria.

Reason #5: Lower Minimum Charges

• Credit bureau data is a volume business

– Did we mention that the bureaus really only want to work with the largest financial institutions?

– We’ve seen credit bureau minimum charges routinely that are $2,000 - $2,500 PER CAMPAIGN.

– LKCS has negotiated much lower minimum commitments.

• $750 minimum for all data purchased within a CALENDAR MONTH

• Purchase data for multiple campaigns within the same month to fulfill the commitment

• No campaign is too small – take advantage of pinpoint accurate targeting (remember those leases coming due?)

Reason #6: Reduced Data Costs

• Easy to Understand Pricing

– We’ve seen pricing grids from the bureaus that we don’t even understand.

– Forget about pricing based on the number of attributes, different pricing for each data field, output costs, etc.

– LKCS’ pricing is straight-forward and easy. Pricing is based on the quantity of records you purchase (the number of people that meet your pre-screen requirements).

What’s the Cost?

• Credit Prospecting

– Pricing depends on a few factors including:

• Number of records purchased

• Demographic selects purchased (rarely affects pricing, but it can by a few cents per record)

• Credit bureau minimum charges

– A good guesstimate: $0.25 per record purchased (ie per person that meets your pre-screen requirements)

LKCS Also Offers

• FREE List Counts and Estimates

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

• Find out exactly how many account holders or prospects meet your pre-screen credit criteria.

• Get the costs to execute a direct mail and/or e-mail campaign to attract new loan business with a pre-screen campaign.

Thank You!

Sid HaasVice President of Business Development

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

www.lk-cs.com