Get in the MYX: Data Strategies for Direct Marketers

Credit Proxy vs. Prescreen: Rules for Auto Lenders - Part 1

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Here's the million dollar question: What type of credit data should marketers for auto lenders leverage to maximize the ROI of consumer marketing efforts? The answer? It depends. It depends on how the credit-based data will be used and for what purpose. As members of the financial services community, auto marketers have access to two primary types of credit-related data:

• Prescreen Credit Data: This powerful data is sourced directly from the credit bureaus and offers marketers access to actual FICO scores, loan and lease maturity dates, payment history, and recent inquiries related to auto finance activity. Tranzact Information Services is the exclusive provider of a tri-bureau prescreen marketing solution (Read more about the competitive advantage you can gain by using tri-bureau prescreen marketing data).

• Proxy Credit Data (also known as estimated or modeled credit data): This data provides marketers with an estimation of where a consumer's FICO score falls on the credit spectrum: High Prime, Prime, Near Prime, Subprime or Deep Subprime. While not 100% accurate, proxy credit data offers you the ability to make the "rough cuts" that can greatly increase marketing efficiency. Tranzact's credit proxy data typically delivers at an accuracy rate of 80%.

The use of prescreen credit data is governed by the Fair Credit Reporting Act, and requires "permissible purpose" to access. It is reserved exclusively for those lenders who are in a position to offer a consumer a firm offer of credit. Prescreen credit data is most commonly used in conjunction with a direct mailer or outbound calling campaign that features some type of "pre-approval" offer. Offers can be customized to meet a lender's specific underwriting criteria (no matter how stringent), leveraging highly targeted data selects including credit score ranges, lease expiration dates, loan amounts, etc. With the growth and popularity of digital marketing, some marketers are also leveraging prescreen credit data to deliver pre-approvals via e-mail and text messaging.

Proxy credit data is non-regulated, and as such, it is available to all marketers. Its use does not require the delivery of a firm offer of credit. This type of data can be enhanced with a number of demographic and geographic selects to further refine a marketer's intended target.

For auto marketers, there is a time and a place for both types of data, the trick is to understand the best way to leverage each one. Learn the best use of both in parts 2 and 3 of this post which will follow over the next few days.

Can't wait for the next two posts to learn how to optimize your marketing spend by leveraging the best combination of prescreen and proxy credit data? Call 800-488-9113 today to speak to one of our knowledgeable direct marketing professionals - they will be happy to evaluate your current automotive marketing strategy and identify areas where you can make significant gains in ROI.