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Introducing: Peter Renton Lend Academy Natasha Madan Experian Gavin Harding Experian
Industry trends (consumer loans) Natasha Madan 4
VantageScore 3.0 at origination 700 680 660 640 620 600 580 560 540 520 Average US VantageScore 3.0: 671 645 Higher than consumers who originate unsecured / secured loans 637 655 500 Secured Personal Loans Unsecured Personal Loans OML Loans Q3 2014 Q1 2015 Q3 2015 5
Risk levels at origination 6 5 Average VantageScore 3.0: 645 Average VantageScore 3.0: 637 Average VantageScore 3.0: 655 4 34% 29% 27% 26% 42% 38% 2 1 Secured Personal Loans Unsecured Personal Loans OML Loans Super Prime Prime Near Prime Subprime Deep Subprime 6
Trend View SM segments Consolidator Rate Surfer Revolver Transactor Mixed $$ M1 M2 M1 M2 REVOLVER/ TRANSACTOR Consumer transfers multiple balances to one loan product Consumer balance transfers debt from one product to another Consumer carries a balance from month to month Consumer pays off the entire or majority of the balance every month Consumer exhibits transactor as well as revolver behavior 7
Consolidator Rate Surfer Revolver Transactor Mixed Consolidator Rate Surfer Revolver Transactor Mixed Consolidator Rate Surfer Revolver Transactor Mixed Trend View SM segments Secured loans Unsecured loans OML loans 5 4 2 1 Q4 2014 Q2 2015 Q4 2015 8
-91% to low -81% to -92-71% to -82-61% to -72-51% to -6-41% to -5-31% to -4-21% to - -11% to -2-1% to -1 1% to 1 11% to 2 21% to 31% to 4 41% to 5 51% to 6 61% to 7 71% to 8 81% to 9 91% to high Correlation with revolving balances 16% 14% 12% 1 8% Percentage of consumers with change in revolving balance after OML loan origination Revolving balance went down more than 1 for: 23% consumers 32% Revolving balance went up more than 1 for: 46% consumers 6% 4% 2% 9
Comparison of loan performance New originations Dec 2014 Performance for the trades (12 months) Dec 2015 Secured Loans Unsecured loans OML Loans 10 9 89% 10 9 85% 10 9 85% 8 8 8 7 7 7 6 6 6 5 4 5 5 13% 8% 4 4 13% 2 1 3% 1% 1% 6% Current 30 60 90 120+ 2 1 2% 1% 1% 11% Current 30 60 90 120+ 2 1 2% 2% 2% 9% Current 30 60 90 120+ 10
Typical OML Borrower post origination OML BORROWER VantageScore 3.0 = 626 55% REV UTILIZATION CREDIT ACTIVE CONSUMER *At least 1 open trade or inquiry 31% VantageScore 3.0 = 687 $9.9K REV BALANCES $5.3K 5 1 3 3 0.3 1 BANKCARD NEW BANKCARD INSTALLMENT ACCOUNTS BANKCARD NEW BANKCARD INSTALLMENT 2.1 (Currently 30+ DPD) 0.7 (Currently 30+ DPD) 0.9 (60+) DELINQUENCIES ON ANY ACCOUNT 0.3 (60+) 11
Who s a typical OML borrower? OML BORROWER CREDIT ACTIVE CONSUMER Age of Borrower 45 yrs 5 4 2 1 4% 21% 43% 2% Age of Borrower 49 yrs 5 4 2 1 9% 19% 26% 33% 13% Income $74K 4 2 35% 25% 19% 18% Income $87K 4 2 2 19% 26% 1 2% 1 5% 12
Dynamics and drivers Peter Renton 13
Investor perspectives Innovation and partnership Consolidation 14
Regulation Customer acquisition Q&A 15
For additional information, please contact: Gavin.Harding@experian.com www.linkedin.com/in/gavinvharding Natasha.Madan@experian.com www.linkedin.com/in/natashamadan Follow us on Twitter: @ExperianVision 16
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