Prescreen decisioning for credit and loan approval has been used as a way to acquire new banking customers since the 1980s.
The first version of prescreen, called batch prescreen, involves printing and mailing generic mass offers.
Using this process, financial institutions prescreen a batch of thousands or millions of prospective customers for a specific credit product, and then send direct mail offers for that credit product to qualifying prospective customers.
Over time, as the market was saturated with these direct mail campaigns, they began to provide only a slight return.
In addition to the large financial and environmental costs, batch prescreen offers often need to be decisioned again when a consumer responds.
In the early 90s instant prescreen was introduced, also known as prescreen-of-one, as a more effective way to gain new customers for credit products.
Prescreen-of-one is a process that allows banks to assess a consumer's creditworthiness from credit report data in certain limited circumstances without the consumer's advance consent.
Under FCRA rules, banks are not permitted in a prescreen transaction to actually see a consumers' credit data or file in the decisioning process, and for any consumer passing the prescreen filter, the bank must make a "firm offer of credit".
This method became more successful than batch as consumers have a greater propensity to accept offers while they are in the purchasing mind frame.
With instant prescreen, institutions are able to make realtime offers to customers through any channel of the institution.
This is a more efficient way to make offers because it eliminates traditional processes that require consumers to fill out an application and wait minutes, hours, or days to find out if they have been approved.
Instant prescreen can also allow customers to begin using their new account immediately.
Booking an initial balance on the card increases long term utilization, and thus profitability of the relationship.
The next generation of prescreen is now available and provides business value that gives financial institutions more effective tools to manage the credit environment today.
Prescreen 3.
0 takes the existing instant prescreen model and improves its accuracy and predictability.
The new model increases approval rates of full file, thin file, and no file consumers, providing significant lift for lenders.
Prescreen 3.
0 provides a better customer experience and increased acceptance rates and profits for creditors by integrating new types of data into the instant prescreen process.
A marketing screen is used on the front end to determine whether a customer is a good fit prior to pulling a more expensive credit report.
Incorporating additional data into the prescreen process helps lenders grant credit to more consumers without changing their risk tolerance, because it provides a more comprehensive evaluation of consumers.
The data also gives insight to the most appropriate credit product to offer.
The first version of prescreen, called batch prescreen, involves printing and mailing generic mass offers.
Using this process, financial institutions prescreen a batch of thousands or millions of prospective customers for a specific credit product, and then send direct mail offers for that credit product to qualifying prospective customers.
Over time, as the market was saturated with these direct mail campaigns, they began to provide only a slight return.
In addition to the large financial and environmental costs, batch prescreen offers often need to be decisioned again when a consumer responds.
In the early 90s instant prescreen was introduced, also known as prescreen-of-one, as a more effective way to gain new customers for credit products.
Prescreen-of-one is a process that allows banks to assess a consumer's creditworthiness from credit report data in certain limited circumstances without the consumer's advance consent.
Under FCRA rules, banks are not permitted in a prescreen transaction to actually see a consumers' credit data or file in the decisioning process, and for any consumer passing the prescreen filter, the bank must make a "firm offer of credit".
This method became more successful than batch as consumers have a greater propensity to accept offers while they are in the purchasing mind frame.
With instant prescreen, institutions are able to make realtime offers to customers through any channel of the institution.
This is a more efficient way to make offers because it eliminates traditional processes that require consumers to fill out an application and wait minutes, hours, or days to find out if they have been approved.
Instant prescreen can also allow customers to begin using their new account immediately.
Booking an initial balance on the card increases long term utilization, and thus profitability of the relationship.
The next generation of prescreen is now available and provides business value that gives financial institutions more effective tools to manage the credit environment today.
Prescreen 3.
0 takes the existing instant prescreen model and improves its accuracy and predictability.
The new model increases approval rates of full file, thin file, and no file consumers, providing significant lift for lenders.
Prescreen 3.
0 provides a better customer experience and increased acceptance rates and profits for creditors by integrating new types of data into the instant prescreen process.
A marketing screen is used on the front end to determine whether a customer is a good fit prior to pulling a more expensive credit report.
Incorporating additional data into the prescreen process helps lenders grant credit to more consumers without changing their risk tolerance, because it provides a more comprehensive evaluation of consumers.
The data also gives insight to the most appropriate credit product to offer.
Source...