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    Lexisnexis Risk Score For Subprimes The largest untapped market for new credit card customers in the United States are the 50 million consumers with inadequate credit-bureau data to generate a desirable FICO score. They are immigrants, young adults, people who were recently widowed or divorced, and consumers who rely on cash. Only about 50% of them have credit cards compared with 90% saturation among the prime and high-prime consumers. But in order to approve them, issuers must have some method for evaluating their risk.

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    Nilson Report - LexisNexis Risk Score for Subprimes

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    Lexisnexis Risk Score For Subprimes The largest untapped market for new credit card customers in the United States are the 50 million consumers with inadequate credit-bureau data to generate a desirable FICO score. They are immigrants, young adults, people who were recently widowed or divorced, and consumers who rely on cash. Only about 50% of them have credit cards compared with 90% saturation among the prime and high-prime consumers. But in order to approve them, issuers must have some method for evaluating their risk.

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    Nilson Report - LexisNexis Risk Score For Subprimes

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    LexisNexis Risk Division
    Lexisnexis Risk Score For Subprimes The largest untapped market for new credit card customers in the United States are the 50 million consumers with inadequate credit-bureau data to generate a desirable FICO score. They are immigrants, young adults, people who were recently widowed or divorced, and consumers who rely on cash. Only about 50% of them have credit cards compared with 90% saturation among the prime and high-prime consumers. But in order to approve them, issuers must have some method for evaluating their risk.

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    of 1

    For 36 years, the leading publication covering consumer payment systems worldwide.

    NOVEMBER 2006 Issue 868

    Reprinted with permission from The Nilson Report.

    Lexisnexis RISK SCORE FOR SUBPRIMES


    The largest untapped market for new credit card customers in the United States are the 50 million con-
    sumers with inadequate credit-bureau data to generate a desirable FICO score. They are immigrants,
    young adults, people who were recently widowed or divorced, and consumers who rely on cash. Only
    about 50% of them have credit cards compared with 90% saturation among the prime and high-prime
    consumers. But in order to approve them, issuers must have some method for evaluating their risk. Lex-
    isNexis has developed an alternative score called RiskView that
    complies with the Fair Credit Reporting Act. RiskView is based
    on the LexisNexis database of over 300 million individuals (in-
    cluding deceased) drawn from public records and other sources
    it describes as nontraditional. Scores range from 250 to 999, and
    they describe the likelihood that an account will become seriously delinquent within the first two years of
    activation. The higher the score, the lower the credit risk.

    Issuers provide LexisNexis with data generated by credit


    card applications. LexisNexis can then verify individual RiskView Scores & Risk Assessment
    Sample Results Based on 249,368 Prospects
    pieces of data on the application, validate that they are
    connected to the same individual, and then authenticate Bad Odds
    Score Prospects Bad Rate Ratio
    the individual using pieces of information such as address
    501–540 1,170 506 43.2% 1.3:1
    history, utility payments, and audits. Providing a RiskView
    541-580 6,168 1,836 29.8% 2.4:1
    score is an additional step. Costs are assessed on a trans- 581–620 20,748 4,535 21.9% 3.6:1
    actional basis. Tom Brown is VP of Financial Services 621–660 33,957 3,986 11.7% 7.5:1
    Solutions at LexisNexis in Boca Raton, Florida, 661–700 31,426 1,959 6.2% 15.0:1
    (561) 999-4422, thomas.brown@lexisnexis.com. 701-740 41,950 1,561 3.7% 25.9:1
    741-780 60,267 1,206 2.0% 49.0:1
    781–820 41,082 312 0.8% 130.7:1
    821–860 11,709 71 0.6% 163.9:1
    861–900 891 3 0.3% 296.0:1
    Total 249,368 15,975 6.4% 14.6:1
    SOURCE: LexisNexis Risk Management

    The Nilson Report #868


    November 17, 2006
    Reprinted with permission from The
    2:41Nilson
    p.m. Report.
    lnr
    *RiskView chart.eps

    © HSN Consultants Inc. 2007 THE NILSON REPORT Reproducing or allowing reproduction or dissemination of any portion of this newsletter in any manner for
    any purpose is a copyright violation subject to substantial fines. Yearly Subscription: 23 issues—$995 Worldwide. ISSN 1087-8718
    THE NILSON REPORT: 1110 Eugenia Place, Suite 100, Carpinteria, CA 93013 USA • PHONE (805) 684-8800 • FAX (805) 684-8825 • info@nilsonreport.com

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