Win with Credit Based Marketing!

LKCS

Credit Prospecting vs. Credit Alerting

• Credit Prospecting– Use credit data PROACTIVELY.

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

• Credit Alerting– Use credit data REACTIVELY.

– Market to prospects or existing account holders actively seeking a loan elsewhere.

Credit Prospecting Campaigns

• 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!

Setting Your Credit Criteria

• There are HUNDREDS of different data fields available.

– Don’t even try to use them all.

– Typically, 3-5 criteria are all you need.

– This is just a pre-screen, you’re not looking at an entire credit report yet.

– Too many criteria can limit your potential audience too much.

Most Popular Credit Criteria

• Auto Loan Campaigns– Number of open auto trades– Aggregate balance of auto

trades– Months remaining on auto

trades– Balance amount on trade with

the highest / 2nd balance– Original terms on trade with the

highest / 2nd balance– High credit on trade with the

highest / 2nd balance

– Number of months remaining on trade with the highest / 2nd

balance– Monthly payment on trade with

the highest / 2nd balance– Estimated auto loan rate– Auto Response Insight– Auto Savings Calculations

• FICO SCORE (or FICO Auto score)

Most Popular Credit Criteria

• Mortgage / Home Equity – Number of open mortgage

trades– Number of open home equity

trades– Combined mortgage and

HELOC balance– Aggregate balance for open

mortgage trades– Aggregate balance for open

home equity trades– Highest balance of open first

mortgage trades– Age of most recent first

mortgage trade

– Age of most recent home equity trade

– Number of first mortgage trades 30+/60+/90+ DPD in last 12 months

– Mortgage date– Mortgage rate / estimated

mortgage rate– Mortgage length of term– Home purchase price– Home purchase date– Loan to Value– Combined loan to AVM value– Mortgage Response Insight– Mortgage Savings Calculations

Most Popular Credit Criteria

• Credit Card Campaigns– Number of revolving trades– Aggregate balance for open

revolving trades– Aggregate credit for open

revolving trades– Aggregate balance to credit

ratio for open revolving trades

• General Attributes and Derogatories

– Number of repossessions– Number of bankruptcies– Months since most recent

bankruptcy– Number of trades currently 30+

days past due (DPD)– Number of trades 90+ DPD

within 12 months– Age of oldest trade

Data at Your Fingertips

• 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.

Overwhelmed?

• DON’T BE – That’s where LKCS comes in!

• We’ll discuss your campaign and recommend that most appropriate criteria and data sets.

• We’ll run counts and work with you to adjust the criteria to hit the right target. Every time!

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

• Auto Loan Recapture– 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

Other Potential Campaigns

• Credit Card 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

• Personal / Unsecured Loans– Fico Scores 680+– Existing installment loan

debt (not credit cards) over $2,000

– No 30-day lates in last 12 months

– No bankruptcies– No collections in last 24

months

Credit Alerting

• Here’s What Happens:

– When your account holder 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, installment loan, credit card or insurance.

– Your account holder database is cross-referenced DAILY with these inquiries and 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.

Acquiring New Account Holders

• Both credit prospecting and credit alerting can be leveraged to attract loan business from new people!

– Rather than starting with a list of names and addresses, we start with a defined geographical area

– Counties, cities/towns, zip codes, radii, etc. can all be used to specify a target region

– Then set your credit criteria and find eligible prospects for direct mail and outbound phone calls

Layering Campaigns

• The Offers:

First Time Home Buyers 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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• E-Mail Marketing

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Home Equity Offer

Using Credit Data

• 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.

Measuring Results

• LKCS can provide a match-back analysis to show you:

– What loans were opened by your campaign recipients (including rate, balance, etc.)

– Other products/services opened by campaign recipients (i.e. wallet share)

– Which people responded to your campaigns

• DataFlex Marketing and Reporting can be used to provide additional reports and insight into these borrowers.

Sample Reports – Campaign Results

Sample Reports – Credit Score Summary

Buying Credit Data

• Credit bureau data is a volume business

– Credit bureau minimum charges are routinely $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?)

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).

How much does it 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.

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!

• Report will detail how many people were in the market for each type of loan, how many met your criteria, and an estimate of how many loans you can close each month with the program.

Thank You!

Sid HaasVice President of Business Development

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

www.lk-cs.com