Solutions Sidestep Credit Bureau Scores

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Fair Isaac Corp. and Acxiom Corp. are introducing solutions to help credit card marketers and other DMers select prospects without relying on traditional credit bureau scores.

Fair Isaac, Minneapolis, debuts its Fair Isaac Qualify marketing score today. Qualify scores let credit card, retail and continuity marketers pick prospects for solicitations based on their likely response to an offer, delinquency risk and overall profitability potential. Because Qualify scores do not use credit data, they are not subject to Fair Credit Reporting Act regulations.

"Marketers have long had difficulty targeting their offers profitably in nontraditional campaigns because of a lack of good prospect data," said Craig Dillon, vice president of Scoring Solutions for Fair Isaac. "We believe businesses need better insight into the quality of prospects, whether they come from mailing and subscriber lists or prospect databases, and we have acquired non-credit data sources, created pooled lender data consortiums and explored nontraditional scoring methodologies specifically to address this concern. The result is our Qualify score."

Qualify helps lenders suppress both non-responders and prospects unlikely to be approved from their acquisition campaigns. Traditionally, campaigns that solicit new customers without extending pre-approved offers suffer from adverse selection because the lowest-performing consumers are most likely to respond.

Fair Isaac used modeling techniques to produce a delinquency-adjusted response score that reduces the correlation between response and delinquency. Qualify also uses a delinquency suppression score to further reduce adverse selection.

To use the score, marketers submit prospect lists to Fair Isaac or rent Fair Isaac's scored list. In either case, the methodology is applied to prospects. The client uses the results to choose prospects it wants to target along with people to be suppressed from its promotion.

Preliminary results suggest that the Qualify score could increase the lifetime value of accounts gained through marketing campaigns by up to 40 percent.

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