Do you have research projects that represent
significant value to your firm, but no resources with which to get
the research done? VALANTEX can help. |
are examples of research projects that created significant value for
How is your company doing compared with it's peer
group? Is the answer found in monthly reports from an industry
round-table group? These reports show your company results
compared with the others in the group, but you can't see how
specific competitors did. Have you wondered if there might be
a better way?
VALANTEX offers rigorous comparisons of
performance against specific companies using publicly available -
but difficult to manage reports. No one has spent more time
looking at annual reports, 10-K and 10-Q filings, earnings press
releases, and securitization trust data.
We assemble all available data on companies of
interest and compare risk/ return dynamics, apparent pricing,
growth, and other factors of interest.
Before the advent of massive centralized
databases, credit bureaus were a regional if not local
presence. Local lenders reported to the local credit
bureau. There was no such thing as 'national' lenders, so
there was no need for national credit bureaus. Fast forward to
the computer age and there was a rapid consolidation of credit
reporting into what are now 3 very large organizations - Equifax,
Experian, and TransUnion.
In selecting a credit bureau for a given
application, many lenders still approach the matter from a
geographical perspective - with bureau preference tables whereby
ranges of ZIP codes are aligned with one primary and one secondary
bureau. The logic here is that each bureau has geographic
strengths based on historical local bureau legacy.
Today's lending reality is that a shrinking number
of very large financial institutions comprises ever more of the
liabilities found on the typical household balance sheet. To
the extent that this trend continues, the relevance of the local
bureau/ local lender relationship diminishes. Many of the
differences found among today's credit reports are related to:
- structural differences in the way the exact
same data is stored at the 3 agencies
- differences in the level of 'tightness' of the
logic used to merge trade, inquiry, and public record items
together to form a single report on a consumer
- policy differences relating to the handling of
duplicate trade items, transferred or sold loans, and inactive
VALANTEX has spent years studying the differences
and similarities among the big 3 credit bureaus. Our expertise
can be used to:
- develop performance - rather than geographic -
based bureau preference tables
- evaluate cost/ benefit tradeoffs in using a
single supplier for credit report data
- assess the effect of each bureau independent of
other known factors in targeting, underwriting, and account
- quantify distributional and performance
differences when using the same model (e.g. the Fico score) at
more than one bureau.
One study we conducted showed that nearly half of
a sample of applicants would receive credit lines more than $3,000
apart depending on which credit bureau was used for
underwriting. Whether you know it or not, the selection of
bureau makes a big difference in the treatment of your customers.
Contact VALANTEX for
more information on credit bureau preferences, or to arrange for a
sales call or proposal.
Many lenders today have an array of products and
price points. Some lenders test dozens more combinations over
the course of a year. You may not always have the resources
available to rigorously evaluate each one.
VALANTEX has reviewed hundreds of products in
dozens of lending organizations. Our review is not limited to
typical default indicators such as delinquency and credit
losses. We look at all relevant measures of customer
performance, and provide a comprehensive review of all components of
value creation or destruction.
VALANTEX works with your marketing, finance, and
team to establish objectives, bases of comparison, available
performance data, and deliverables.
What would happen to the performance of loans in a
securitization trust if the master servicer went bankrupt?
What are the long-term implications of a major co-brand partner
moving their portfolio to another lender? How much higher than
expected might portfolio losses be if the unemployment rate climbs
above 6% by the end of 2006?
These all represent scenarios that VALANTEX has
helped clients test. Combining our industry knowledge with
specific portfolio performance data, and available industry and
economic data, allows us to create the most accurate depiction of