Experian: Big Data Use Case
This article covers how Experian leverages Big Data and analyzes one of Experian’s products.
Experian key facts at a glance
- 125 years into the making, ~18K people strong, in 45 countries, named “Forbes Worlds Most Innovative Company” in 2018.
- Experian’s ta line “a world of insight” says it all in terms of how it has evolved from a pure credit-scoring company to one connecting consumers and businesses, and society by offering B2B and consumer services.
- Experian educates individuals on financial literacy and guides them on accessing the right financial services. It helps businesses thrive by helping identify new business opportunities, excel in operational excellence, enhance customer experience and make better strategic decisions. It helps lenders lend responsibly and fairly. Additionally, it helps consumers protect against fraud and organizations identity fraud, crime.
- Experian offers capabilities in areas of Market Insight, Vehicle Identities, Customer Insight, Credit Risk, Application Processing, Fraud Detection, and Debt Management.
How does Experian decide credit rating?
Experian’s FICO scoring model provides credit scores (ranging from 300 to 800). The score indicates the likelihood and probability of the consumer missing a payment. Higher scores relate to favorable and attractive offers from lenders and attractive lending terms. This score is determined based on a risk-based credit scoring proprietary model fed by consumer credit reports to assign a score for consumers. Additional weighted factors include:
- payment history (high weightage)
- amounts owed (high weightage)
- credit history (moderate weightage)
- credit management (moderate weightage)
- credit mix (low weightage)
- new credit (low weightage)
VantageScore is a tri-bureau credit score, a patent-pending methodology providing lenders with a consistent interpretation of consumer credit files across all three major credit reporting companies and with the ability to score a broad population. Experian provides business credit scores as well.
Product Analysis
Experian has added a range of data & analytics offerings to help businesses including small businesses tap into analytics. One such product is Data Select(™) Tool. Key offerings:
- Lists & leads: helps businesses save on mailing costs by reaching niche audiences instead of mass mailing
- Strategy & analytics: Concierge service to help create & execute marketing strategies.
Based on the nature of the business, Experian helps direct marketers, telemarketers pull apt marketing leads list based on chosen parameters to reach niche markets from children to grandparents, mobile homes to mansions, and metropolitan areas to rural areas. A combination of the following sources of data is used to generate Marketing Qualified Lead (MQL) lists:
- Radius mapping
- U.S. Business Database (16 million businesses)
- Individual/Household demographics (access to 98% of U.S. households)
- Children’s data (newborn network)
- Transactional retail purchase data
- Ethnic data
- Mortgage data (new mortgage on existing or new homes, move data)
- Property data (dwelling type, new homeowners)
- Behavioral and lifestyle characteristics, to understand what drives customer behavior (hobbies, buying trends, brand preferences, product usage, frequent travelers, computer buyers, health enthusiasts, DIYers, pet owners, etc)
- Demographic data (age, gender, income, marital status)
- Firmographic data (org size, age, # of locations, market share, industry position, etc)
References
https://www.experian.com/dataselect/
https://www.experian.com/blogs/ask-experian/how-is-your-credit-score-determined/
