What is alternative data and how does it differ from traditional credit data? How can alternative data be used to maximize your portfolio? Learn how to leverage this new data set to maximize profits in your business. We’ll cover the latest findings in lender and consumer perspectives on alternative credit data and ways to use alternative credit data across the customer lifecycle giving you a deeper view of the consumer.

1. © 2018 Experian Information Solutions, Inc. All rights reserved. Experian and the Experian marks used herein are trademarks or registered trademarks of Experian Information Solutions, Inc.
Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form
or manner without the prior written permission of Experian. Experian Public.
Diving for Data:
How Alternative Credit Data Provides
Lift in Your Portfolio.
September 25, 2018

2. ©Experian2 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
• Introductions
• Alternative credit data overview
• Hit-rate analysis and data performance
• Account review use case
• Q&A
Our Conversation Today

3. ©Experian3 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Introductions
Paul DeSaulniers
Sr. Director, Product Management
Experience: 20 yrs. in Banking and FinTech
Responsibility:
• Head of product for Scoring, Alternative
Data & Collections at Experian.
• Quoted in industry-leading publications
such as PYMNTS and Time.
• Frequent presenter at industry events
such as CUNA, Experian’s Credit Union
Advisory Council, LendIt and Money
20/20.
Crissy Wallace
Data Analytics Consultant
Experience: 18 yrs. in U.S. credit and
database management
Responsibility:
• Leading complex market research with a
focus on economic research
• Monitoring U. S. credit and the
macroeconomic climate
• Provides client consultation for analytical
engagements, including proof of concept
tests, model score validation, product
development, portfolio profiling, risk and
trend analysis.

4. ©Experian4 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Alternative Credit Data Overview
Alternative Credit Data
Overview

5. ©Experian5 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
The Riddle of Alternative Credit Data
How do we
effectively score
of consumers?
over
18 years77%
under
18 years23%
Thick59% 5 or more trades
Thin25%
No Hit7%
Invisible9%
321 Million
U.S. Population
1-4 trades
Data other than trades
No record of credit
Primary Credit Report
Data Sources
Tradelines
Inquires
Public Records
> Bankruptcy
Mainstream
Finance
Deeper View of Your Consumer
100%

6. ©Experian6 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
What is Alternative Credit Data?
• Tradelines
‒ Credit card
‒ Auto loan
‒ Mortgage
• Credit inquiry
• Internal records
‒ Bankruptcy
• Alternative financial
service data
• Rental payments
• Asset ownership
• Utility payments
• Full file public records
• Consumer
permissioned data
ALL INFORMATION THAT IS FCRA-COMPLIANT
Traditional Credit Data Alternative Credit Data
Displayable. Disputable. Correctable.

7. ©Experian7 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Traditional Lenders: Adjacent Players:
• Strengthen & expand portfolios
• Increase & sustain competitive
advantage
• Improve customer experience
• Enter markets via new business
models (e.g. Fintech)
• Grow in underserved segments
(e.g. Alternative Finance)
• Differentiate data assets &
engage consumers (e.g.
Information Services)
What opportunities are we striving to address with
Alternative Credit Data?
Consumers
▪ Increased access to
affordable financing
▪ Speed / ease / convenience
▪ Build credit

8. ©Experian8 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
How alternative data sources relates to consumer credit
worthiness
Ability
to repayStability
Willingness
to repay• AFS data
• Bill payment
• Subscription data
• Rental data
• Address history
• Expanded Internal
records
• Rental data
• AFS data
• Cash flow
• Expanded Internal
records
• Education data
The traditional
credit profile data
was developed to
assess a consumers
credit worthiness

9. ©Experian9 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Experian’s pursuit of alternative credit data
Key Experian milestones
Rental history
Acquired
RentBureau®
Full-file public
records
Launched Extended
ViewSM Score
Consumer
permissioned
Partnered with
Finicity
Alternative financial
services
Acquired
Clarity Services
Increases ability to predict consumers’
capacity and willingness to repay
Not historically or consistently reported
to national credit bureaus
Can be effectively and compliantly
operationalized and scaled
Working
criteria for
alternative
credit data

10. ©Experian10 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Rental data
Summary:
• Experian’s RentBureau® is the largest U.S.
rental payment database
• Data on 19 million residents from over 1,200
data furnishers (e.g., property managers,
rental collections agencies, payment
processors)
• Includes both positive and negative
data (lease terms, on-time payments,
late payments / not sufficient funds)
Value:
Risk
score
change
Build your credit
You’re managing
many types of credit
lines, but you may be
missing out on adding
rent payments to your
credit report
Report your rent now

11. ©Experian11 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Experian’s Extended ViewSM score leverages
public records to score ‘thin-file’ and ‘no-hit’
consumers
• Information in a consumer’s public record that is
located at the state and local level
• Property and assets
• Address stability
• Education
• Identity verification
• Risk factors
• Professional licensure
• Aggregated and managed in an FCRA compliant
data warehouse
Expanded public records
Value: Extended ViewSM adds ~10% lift in
evaluating credit worthiness for thin-file consumers

12. ©Experian12 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Experian’s Transaction Services leverage user-
permissioned account aggregation to expand
and accelerate decisioning
• Facilitates real-time access of consumer and commercial
bank data at the transaction level.
• Users permission access to their bank, brokerage
and 401k accounts; 95% of all U.S.-based checking
accounts can be accessed
• Verify
• Account ownership
• Frequency of deposits and withdrawals
• Direct deposit income and individual transactions
• Reports are FCRA compliant and can be used in
underwriting decisions as well as for simple verifications
of income, assets and cash flow
Account aggregation
Value:
Increase efficiency – Mortgage loan cost per day
to close is $126. Reduce verification costs for
Assets and Income by up to $756
Minimize risk – Mortgage fraud related to Income
and Assets is up 16.9% from 2016 to 2017
Aggregation based verification directly from banks
eliminates paper based fraud
Personalize experiences – Consumers expect
quick and easy access to credit
Unlock intelligence – To remain competitive with
shift toward increased automation and digitization

13. ©Experian13 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Summary:
• Experian’s Clarity is largest U.S. specialty
credit bureau
• Primarily serving non-prime population
and lenders
• 60+ million consumers on-file
• Includes both positive and negative loan
payment data
• Real-time credit reporting
• Founded 2008
• 100 employees; Clearwater, FL
Alternative financial services

14. ©Experian14 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Experian Alternative Credit Data
Experian clients
Mobile apps
Business /
partner apps
Web apps
Internal apps
(Experian)
Online
Batch
File OneSM
Trade line / inquiry /
public record
Clarity
RentBureau®
Consumer
Permissioned
Additional
FCRA assets
Data Platform
API Management
and Gateway
API Management
and Gateway

15. ©Experian15 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Alternative credit data is unique & additive
• 1 open auto loan
• 2 credit cards
National
Credit Bureau
• 2 open trades
• 5 closed trades paid in full
• 3 inquiries in 90 days
• 2 bank accounts last 12 months
• 1 move in last 2 years
Clarity
Specialty Bureau
• 750 EVS score
• Attended 4 year college
• Profession: registered nurse
Extended
View Score
• 1 open and current rent trade
• No derogatory rental history
RentBureau
Finicity
Thin credit file gives little insight into
credit risk.
Finicity confirms income and assets with
consumer permission.
RentBureau shows one open and current
rental trade with no derogatory information.
Extended View Score indicates low
risk with supplemental information on
education and profession.
Adding Clarity data provides significant
positive information on performance on
alternative finance trades not available
on traditional credit file.
• Verified income: $ 5,127
• Verified assets: $16,944

16. ©Experian16 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.

17. ©Experian17 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.

18. ©Experian18 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.

19. ©Experian19 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.

20. ©Experian20 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.

21. ©Experian21 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.

22. ©Experian22 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Summary of Alternative Credit Data Whitepaper Findings
of lenders report that they decline more
than 5% of applications because they have
insufficient information to make a
loan decision
60%
Alternative finance
consumers tend to be
much younger, on
average, than the U.S.
population on File One.

23. ©Experian23 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Alternative Credit Data Overview
Hit rate analysis
and data performance
Deep Dive: Auto, Bankcard,
and Personal Loan Samples

24. ©Experian24 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Hit rate analysis methodology
Open trades Dec 2016
Performance Dec 2017
Full Clarity
consumer file
Hit Rate Analysis
(consumers with Clarity hit)

25. ©Experian25 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
VantageScore® 3.0
Model Overview
A = Super-prime 781–850
B = Prime 661–780
C =Near prime 601–660
D = Sub-prime 500–600
F = Deep sub-prime 300–499
The score used as primary comparison for
traditional bureau performance
• Predicts risk of borrower
o Likelihood of future serious delinquencies
(90 days later or greater)
o Any type of account
• 24–month performance
• Score range of 300–850
o Higher scores represent a lower likelihood of risk
o Lower scores are higher risk

26. ©Experian26 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
There are several ways to use alternative credit data
Suppression Criteria
Score

27. ©Experian27 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Existing auto hit rates
15%
of consumers with an
auto trade matched to
Clarity alternative
finance data
3%
9%
23%
44%
61%
50%
5%
26%
28%
37%
4%
0%
Super Prime Prime Near Prime Subprime Deep Subprime Exclusion
Overall Hit Rates:
Percentage of consumers in each score band that have alternative
finance data
Alt
Finance
15%
No Alt Finance
85%
704
627
717
Overall Hits No Hit
Average VantageScore®

28. ©Experian28 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Existing auto consumers with alt finance presence are more
likely to be 90+ DPD in the first 12 months
4.8%
0.1%
0.7%
2.9%
8.5%
15.5%
0.90%
0.1% 0.3%
1.4%
4.8%
11.5%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Total Super Prime Prime Near Prime Subprime Deep Subprime
Auto 90+ Bad Rate
by VantageScore V3 Band
Clarity Hit Clarity No Hit
433% more
likely to go
90+ DPD

29. ©Experian29 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Existing bankcard hit rates
10%
of consumers with a
bankcard trade matched
to Clarity alternative
finance data
3%
8%
20%
39%
58%
4%
40% 39%
13%
7%
0% 0%
Super Prime Prime Near Prime Subprime Deep Subprime Exclusion
Overall Hit Rates:
Percentage of consumers in each score band that have alternative
finance data
Alt
Finance
10%
No Alt Finance
90%
736
656
745
Overall Hits No Hit
Average VantageScore®

30. ©Experian30 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Existing bankcard consumers with alt finance presence are
more likely to be 90+ in the first 12 months
7.4%
0.1% 1.0%
5.5%
16.8%
36.4%
1.10% 0.0% 0.4%
3.0%
10.4%
29.7%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Total Super Prime Prime Near Prime Subprime Deep Subprime
Bankcard 90+ Bad Rate
by VantageScore V3 Band
Clarity Hit Clarity No Hit
573% more
likely to go
90+ DPD

31. ©Experian31 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Existing personal loan trade hit rate
24%
of consumers with a
personal loan trade
matched to Clarity
alternative finance data
3%
12%
31%
53%
70%
0%
12%
43%
25%
19%
1% 0%
Super Prime Prime Near Prime Subprime Deep Subprime Exclusion
Overall Hit Rates:
Percentage of consumers in each score band that have alternative
finance data
Alt
Finance
24%
No Alt
Finance
76%
673
612
692
Overall Hits No Hit
Average VantageScore®

32. ©Experian32 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Existing personal loan consumers with alt finance presence
are more likely to be 90+ in the first 12 months
7.5%
0.2%
1.6%
4.5%
11.3%
25.1%
1.80%
0.1% 0.6%
2.5%
6.9%
18.6%
0%
5%
10%
15%
20%
25%
30%
Total Super Prime Prime Near Prime Subprime Deep Subprime
Personal Loan
90+ Rate
Clarity Hit Clarity No Hit
315% more
likely to go
90+ DPD

33. ©Experian33 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
The added value of Clear Early Risk ScoreTM
What is in it?
Premier Attributes,
Clarity Attributes,
Score range of
300-850
What does it do?
Predicts short-term risk:
90+ DPD on first 12
months of traditional
bureau trade
Is it FCRA?
Yes, output includes
score, 4 adverse action
reasons, 5th factor when
inquiries are present
Does it replace
VantageScore?
No, it supplements
traditional risk scores

34. ©Experian34 9/25/2018 Experian Public
With a traditional risk score you can approve
10% of the population inside your risk criteria
By adding AFS data you can approve 16% of
the population inside the same risk criteria 60%
lift in performance
The power of adding
alternative credit data
Near prime population
0%
5%
10%
15%
20%
25%
30%
35%
40%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Cumulative%ofBadAccounts
Top % of Score
Clear Early Risk Score VantageScore 3.0 Baseline

35. ©Experian35 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Clear Early Risk Score helps identify bankcard opportunities
by layering on additional knowledge about consumer
performance
Top: Bad Rate
Bottom: Percent of trades
Swap out strategies:
Consumers bucketed as
prime, with worse
performance rates than
average
Swap in strategies:
Consumers bucketed as
near prime/subprime,
with better performance
rates than average

36. ©Experian36 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Utilizing Clarity data to refine
account management strategies
Line strategies
Collection
strategies
Improve
cross-sell
Trigger new
inquiries
Offer education
Custom
modeling
Loss
Forecasting

37. ©Experian37 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Loss Forecasting with Alternative Finance Data

38. ©Experian38 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
1 Alternative credit data is being used by traditional and alternative lenders
2 Can be used to gain a deeper view of the consumer (current and prospective)
3 Alternative credit data is supplemental and essential
4 FCRA-compliant and can be used for adverse action
Takeaways

39. ©Experian39 Experian Public September 2018 Diving for Data – How Alternative Credit Data Provides Lift in Your Portfolio.
Paul DeSaulniers
Sr. Director, Product Management
Crissy Wallace
Data Analytics Consultant
Questions?

40. © 2018 Experian Information Solutions, Inc. All rights reserved. Experian and the Experian marks used herein are trademarks or registered trademarks of Experian Information Solutions, Inc.
Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form
or manner without the prior written permission of Experian. Experian Public.
Thank you!