High end analytics.
Risk and response models.
The key to any successful direct mail campaign is to strike a balance between risk and responsiveness. A well balanced campaign can produce a low cost per funded loan and a low default rate. After a few campaigns, a re-optimized model is needed to further enhance your direct mail campaign performance.
- Volume: Campaign should have enough volume to gain meaningful insights
- Data: Use FCRA and Non-FCRA data, avoid using demographics
- Firm Offer of Credit: is always better in terms of response rate
- Use Multiple Credit Bureaus: Each bureau has unique coverage
- Conduct A/B Testing whenever possible
- Response Model should be paired with a risk model to control for defaults
- Build a landing page with the same look and feel of your direct mail creative.
A.I. and ML
models that drives real ROI.
For clients with longer-term products beyond 2 years of service, prepayment speed is important. We also advise our clients on prepayment speed. On one hand, a prepaid loan is by definition not a defaulted loan, however a fast prepayment speed could hurt your profitability especially when our clients offer incentive programs.
- Higher FICO scoring population generally prepays faster
- 0.5-1% prepayment speed per month is generally acceptable
- Prepayment speed exceeds 2% per month needs investigation
- Prepayment penalties are not legal
Underwriting algorithms.
Custom underwriting.
Credit risk remains the single biggest issue amongst our clients. Credit risk or defaults could be caused by various reasons such as customer acquisition channels, pricing, terms and amount of the credit offered. It could also be ineffective underwriting data, rules and models. Here are some quick reason on effectively managing your credit risk.
- Fraud Control: 1st Party, 2nd Party and Third Party Fraud Prevention
- Credit Risk Management: Rule, Credit Risk Models, FPD Analysis
- Verification & Manual Underwriting: Models & Automation, Scaling Solutions
- Product Management: Installment Loans and Open Ended Line of Credit
- Customer Retention: Marketing, Product Mix, Cross Sell, Pricing & Terms
Decision engine.
Real time decisioning.
Our clients greatly benefited from MaxDecisions insight into their existing credit bureau feed. We have worked with most of the prime and subprime bureaus to further refine the reported information to give our clients a lift in performance.
- Hundreds of additional credit attributes that’s been tested
- MaxDecisions Enhanced Credit Attributes goes beyond standard trade line information
- We transform unusable unstructured data into organized readable format so our clients can write enhanced rules
- Clients doesn’t have to purchase additional information from credit bureaus.