Traditionally, credit providers have tended to only use one credit bureau as hard-coded computer-to-computer links have made it difficult and costly to access and use data from additional bureaus. New technologies and the advent of Comprehensive Credit Reporting (CCR) have led many lenders to re-assess their previous single-bureau strategies and to deploy more flexible software systems that enable multi-bureau access and use.
Given these enabling technologies and increasing regulatory expectations, it is vitally important that credit providers make best use of all the data that can be provided by bureaus. In order to do this, a multi- bureau evaluation exercise needs to be undertaken, ideally by a third-party independent of a credit bureau. By attaching data from multiple bureaus to a lender-supplied file (of applicants or existing customers), Connected Analytics can evaluate the strengths and weaknesses of each bureau.
Considerable data asymmetry exists across the bureaus in Australia; not all bureaus have the same information. Even in a negative reporting environment, these data differences can be used to improve the quality of credit decisions at all stages of the credit lifecycle (originations, behavioural and collections). As the industry moves to CCR, it will be even more important to assess the data held by the credit bureaus, especially through the transitional period where new comprehensive data may be loaded by a credit provider onto one bureau but not onto another.
Connected Analytics undertakes the analytical work to identify differences in bureau data (by geography, industry segment, age and other segments) and makes estimates of the additional value that would accrue to a credit provider if using more than one bureau. We can then advise on strategies for bureau usage including which bureau to call first and which to call subsequently, based on decision rules that will maximise ‘hit’ rates (i.e. strong matches), minimise ‘no match’ responses and on the return of data that is richest and of most value to the client.
Our consultants can also evaluate the performance of scores that the bureaus derive from their data and recommend how best to implement them in a client’s credit decisioning process.
From the available evidence on relative bureau strengths/weaknesses, we provide advice based on bureau costs v business benefits, as to the commercially optimal strategy for a client (which may differ from the statistically optimal result) for multi-bureau access and use.
This service is often provided as part of the following Solution Sets: