Have you ever wondered whether you should consider using a blended scorecard in your small business decisioning? In this Sip and Solve session I provide an overview of blended decision making, why it’s important and what data can be leveraged to start or enhance your blended data analysis. Watch the recording of this talk on our archive page: https://www.experian.com/business-information/landing/sip-and-solve.html

1. 1 © Experian 02/10/2019
Sip and Solve
Blended Decision Making
Featuring:
Emily Garrett
Analytics Consultant
Experian Business Information

2. 2 © Experian 02/10/2019 Sip and Solve – Blending Decision Making
Source: https://digital.com/blog/small-business-statistics/
Small businesses employ ~50% of U.S. workers

3. 3 © Experian
Jane starts a business
with a partner funded by
their savings.
The business grows and
needs more capital, they
may borrow from friends
and family, apply for
startup funding.
More growth means they
now need access to more
reliable capital – start
applying for credit.
Business is hiring workers
and becoming more
complex, need additional
forms of capital for short
and long term needs.
Jane now has 75
employees and business
is generating significant
cash flow to fund
operations, but she may
need to consider a loan
for capital expenses for a
new building to house the
growing business.
Consumer Credit
Commercial
Credit
Consumer + Commercial Credit
02/10/2019 Sip and Solve – Blending Decision Making
It can be difficult to know when a business has transitioned
from consumer-only to blended to commercial-only, but
blended will cover all the bases!
Lending and risk assessment depends on the size and
maturity of a business

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• Majority of consumer and business credit
profiles will reflect similar risk
• Where consumer and business credit risk are
not similar, blended views can provide significant
lift in assessing risk
Data reflects
low and low-
med business
risk
Blended scorecards can show a more complete picture
of small business risk
Data reflects
consumer
credit scores
750+

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What are some reasons you might not be using a
blended scorecard currently?
“We manually underwrite all of our loans.”
• A blended scorecard helps improve consistency in underwriting decisions
• Automatic decisions allow underwriters to spend more time on complex
decisions
“We don’t have the right data to develop a blended scorecard.”
• Experian can match and append archive data to your historical applications
• Experian’s experienced analysts and data scientists can help you build
custom models
• Ascend Analytical Sandbox

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Application
Received
Business
Bureau Found?
Consumer
Scorecard
Blended
Scorecard
No Yes
Route App
Depending on
Score
Auto Decision
(Appr/Decl)
Manual Review (Rec
Appr/Decl)
Most lenders prefer using a blended scorecard if a
business bureau is available for an applicant

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What types of data should you focus on?
• Business revenue
• Household income
• Consumer Debt-to-Income
• Utilization
• Beneficial owner information
• Identifying information
Application
• Generic risk scores such as Vantage
score
• Number of recent inquiries
• Derogatory information such as past
bankruptcies and collections
• Delinquent trades
Consumer Bureau
• Generic risk scores such as
Intelliscore Plus v2 and Financial
Stability Risk score
• Industry
• Number of recent inquiries
• Derogatory information such as past
bankruptcies and collections
• Delinquent trades
• Months in business
Business Bureau

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What does blended data for analysis look like?

9. 9 © Experian 02/10/2019 Sip and Solve – Blending Decision Making
What does blended data for analysis look like?

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Digging in to blended data

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Portfolio management uses for blended data:
• Renewal decisions
• Credit line increases
• Credit line decreases
• Identifying cross-sell opportunities
• Early warning signs
02/10/2019 Sip and Solve – Blending Decision Making
How can I use blended data outside of originations?

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Next steps include answering the following questions:
• Where are you in the process right now and are there gaps?
• Do you currently have the right analytics or could you benefit from some assistance?
• What might you need from a data and infrastructure perspective?
• Are you currently collecting the right information on your applications?
– Non-bureau data for your scorecard (income, revenue, etc.)
– Information required for bureau matching:
• For the business: Name, Tax ID, Address
• For the consumer(s): Name, Address, SSN, birth date, permission
02/10/2019 Sip and Solve – Blending Decision Making
This is all great, now what?

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Thank you!
Have questions or want to learn more about blended data?
• Chat with us: bit.ly/sip-solve-chat
Next Sip and Solve:
• Tuesday, February 19th – Visualizing Portfolio Data
• Register here: bit.ly/sip-and-solve