信用建設者產品：評分影響和消費者績效.pdf

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1、Credit Builder ProductsScore impacts and consumer performanceSVP,Consumer Lending Business LeaderLiz Pagel1 2024 TransUnion LLC All Rights ReservedAgenda2024 US Financial Services Summit1.The credit builder landscape2.Profile of credit builder users Q4 20233.Credit builder tradelines and credit scor

2、e4.Credit activity post credit builder tradeline5.Performance of credit builder users2 2024 TransUnion LLC All Rights ReservedWe studied three popular credit builder products3Note:Products are illustrative examples and not exhaustive of all credit builder products in market.Products out of scope inc

3、lude:debit cards,debit account linked line of creditSource:Lender websites;TransUnion analysis.Traditional secured cardOpen secured cardSecured installment loansDescriptionCredit card secured by a locked cash depositPayment card connected to a deposit account Installment loan secured by locked cash

4、depositAmount/spend limitSpend limit equal to security depositSpend limit linked to deposit account balanceTypically$100$500SecurityLocked depositDDA accountLocked deposit,typically in a CD or savings accountTermRevolvingOpenAverage 412 monthsPayment termsMinimum monthly payment required,balances ca

5、n revolveBalance due in full monthly,paid out of deposit accountEqual monthly paymentsOther detailsMinimum 14 days between purchases and bank debitDeposit unlocked at end of term 2024 TransUnion LLC All Rights ReservedThe number of consumers with credit builder products has grown rapidly over the pa

6、st few years4Source:TransUnion US consumer credit databaseNumber of Credit Builder Consumers3.43.43.23.65.80.90.91.34.37.910.2024681012Q4 2021Q4 2022Q4 2023Number of Consumers(M)Traditional Secured CardOpen Secured CardSecured Installment 2024 TransUnion LLC All Rights Reserved5Rapid growth of credi

7、t builder products has created the need to better understand this expanding form of creditThis study aims to answer the following key questions:Who are the consumers using credit builder products?How do credit builder products impact scores?Do credit builder consumers maintain these scores long term

8、?What types of products do credit builder consumers go on to originate?How do credit builder consumers perform on traditional credit products?2024 TransUnion LLC All Rights Reserved2024 US Financial Services Summit6Who are the consumers using credit builder products?2024 TransUnion LLC All Rights Re

9、servedAs of Q4 2023,most consumers with active credit builder products were below prime across the different product typesDistribution of Credit Builder Consumers at Q4 2023,by Product7VantageScore 4.0 risk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781+Percen

10、tages may not add to 100%due to roundingSource:TransUnion US consumer credit database40%66%71%26%16%22%23%13%6%9%4%1%2%0%Traditional Secured CardOpen Secured CardSecured InstallmentSubprimeNear primePrimePrime plusSuper prime 2024 TransUnion LLC All Rights ReservedSecured installment and open secure

11、d card users are twice as likely to be on the alternative credit file versus traditional secured card users8TruVision Alternative Short-Term Risk ScoreSource:TransUnion US consumer credit database;US alternative credit databasePercentage of Credit Builder Consumers With Alternative Credit Data Hits,

12、Q4 202334%60%63%Traditional Secured CardOpen Secured CardSecured InstallmentAlternative Hit 2024 TransUnion LLC All Rights ReservedCredit builder tradelines are mostly one or two years old9Percentages may not add to 100%due to roundingSource:TransUnion US consumer credit databaseCredit Builder Consu

13、mers and Age of Their Oldest Credit Builder Trade,Q4 202335%20%16%9%5%12%3%50%26%14%10%0%0%0%65%24%7%4%1%1%0%0-1(1-2(2-3(3-4(4-5(5-1010+YearsTraditional Secured CardOpen Secured CardSecured Installment 2024 TransUnion LLC All Rights ReservedMost consumers who originated credit builder products held

14、a traditional product earlier10Based on consumers with a credit builder tradeline as of Q4 2023 and then seeing if any tradelines were opened earlier than the credit builder tradeline was originated.Source:TransUnion US consumer credit databasePercentages may not add to 100%due to roundingFirst Prod

15、uct Distribution,Q4 202365%79%91%35%21%9%Traditional Secured CardOpen Secured CardSecured InstallmentTraditional ProductCredit Builder Product 2024 TransUnion LLC All Rights Reserved2024 US Financial Services Summit11How do credit builder products impact scores?Do credit builder consumers maintain t

16、hese scores long term?2024 TransUnion LLC All Rights ReservedUsing a sample of credit builder consumers as of Q1 2022,we tracked their short-and long-term score movement from originationSelection criteriaAll consumers with credit builder tradelines as of Q1 2022Eligible consumers assigned to a disti

17、nct credit builder product grouping traditional secured card,open secured card,secured installmentConsumers evaluated from cb to cb+6 and cb+6 to cb+21:How do credit scores change in the months following the origination of the credit builder tradeline?cb+21cb=Credit Builder Tradeline Originationcb+6

18、Period after earliest credit builder tradeline origination date12 2024 TransUnion LLC All Rights ReservedPrior to originating a credit builder product,the majority of consumers were subprime13VantageScore 4.0 risk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781

19、+Source:TransUnion US consumer credit databasePercentages may not add to 100%due to roundingDistribution of Credit Builder Consumers by Risk Tier Prior to Origination(cb)23%52%83%73%19%9%17%4%Traditional Secured Card5%2%Open Secured Card5%4%Secured InstallmentUnscoredSubprimeNear primePrimePrime plu

20、sSuper prime 2024 TransUnion LLC All Rights ReservedAt the time of originating their credit builder products,most consumers were under age 4014Source:TransUnion US consumer credit databasePercentages may not add to 100%due to roundingDistribution of Credit Builder Consumers Ages at Origination(cb)7%

21、6%16%22%21%31%45%46%16%17%18%12%7%8%15%2%Traditional Secured CardOpen Secured Card6%Secured Installment18-2122-2728-3940-4950-6465-99Unknown 2024 TransUnion LLC All Rights ReservedAt the time of credit builder origination,consumers held traditional products,primarily:credit cards,student and auto lo

22、ans15Source:TransUnion US consumer credit databaseTraditional Product Penetration of Credit Builder Consumers at Origination(cb)53%33%27%23%14%10%3%CardStudent loanAutoPrivate labelUnsecured loanSecured loanMortgageSecured Installment27%27%18%11%6%5%1%CardStudent loanAutoPrivate labelUnsecured loanS

23、ecured loanMortgageOpen Secured Card23%19%12%11%2%5%2%CardStudent loanAutoPrivate labelUnsecured loanSecured loanMortgageTraditional Secured Card 2024 TransUnion LLC All Rights ReservedWe consider two consumer personas to compare:1.Thin file consumers are defined as having one trade on file or two o

24、f the same product types 2.New to credit consumers oldest trade on file is 2 years16Scored New to Credit Scored EstablishedConsumer is scored prior to opening a credit builder product;however,is either:Thin file1orNew to credit2Consumer is scored prior to opening a credit builder product,and is NOT:

25、Thin file1OrNew to credit2 2024 TransUnion LLC All Rights ReservedA third to over half of consumers are new to credit,with a significant population that has traditional credit history across products17Percentages may not add to 100%due to roundingDistribution of Consumer Personas Prior to Originatio

26、n by Credit Builder Type(cb)Source:TransUnion US consumer credit database45%39%56%32%56%39%23%5%Traditional Secured CardOpen Secured Card5%Secured InstallmentScored establishedScored new to creditUnscored 2024 TransUnion LLC All Rights ReservedAmong unscored consumers,within six months of opening a

27、credit builder product,most became scoredUnscored18VantageScore 4.0 risk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781+Source:TransUnion US consumer credit databasePercentages may not add to 100%due to roundingPost Credit Builder Origination Score Change by P

28、roduct Type(cb to cb+6)Traditional Secured CardOpen Secured CardSecured Installment100%cb7%16%27%50%cb+6UnscoredSubprimeNear primePrimePrime plusSuper prime100%cb1%32%55%12%1%cb+6100%cb4%12%29%54%1%cb+6 2024 TransUnion LLC All Rights ReservedAmong consumers with scores,new-to-credit consumers are mo

29、re likely to be subprime19VantageScore 4.0 risk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781+Source:TransUnion US consumer credit databasePercentages may not add to 100%due to roundingRisk Distribution of Scored Consumer Personas Prior to Origination by Cred

30、it Builder Product(cb)67%90%80%26%16%0%5%2%Traditional Secured Card8%2%Open Secured Card4%1%Secured InstallmentSubprimeNear primePrimePrime plusSuper prime68%85%74%24%11%20%1%6%1%Traditional Secured Card3%Open Secured Card5%1%Secured InstallmentScored New to Credit Scored Established 2024 TransUnion

31、 LLC All Rights ReservedWe first look at:1.Thin file consumers are defined as having one trade on file or two of the same product types 2.New to credit consumers oldest trade on file is 25-point decline,Maintained is-25 to+25-point change,Improved is 25-point increaseVantageScore 4.0 risk rangesSubp

32、rime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781+Source:TransUnion US consumer credit databasePercentages may not add to 100%due to roundingPost Credit Builder Origination Score Change by Product Type(Subprime at cb to cb+6)Traditional Secured CardOpen Secured CardSecured

33、 InstallmentDeclinedMaintained2%29%69%Improved22%32%47%DeclinedMaintained10%29%61%Improved14%27%58%DeclinedMaintained13%52%35%Improved12%24%64%SubprimeNear primePrimePrime plusSuper prime 2024 TransUnion LLC All Rights ReservedAmong consumers who improved their scores within six months of originatio

34、n,60%maintained or built on those scores in the long termScored New to Credit22Scored change defined as:Maintained is-25 to+25-point change,Improved is 25-point increaseSource:TransUnion US consumer credit databasePercentages may not add to 100%due to roundingSubprime at cb:Credit Builder Originatio

35、n Score Change by Product Type(cb+6 to cb+21)40%34%44%28%31%30%31%34%26%Traditional Secured CardOpen Secured CardSecured Installment100%100%100%66%60%56%DeclinedMaintainedImproved 2024 TransUnion LLC All Rights ReservedFor near prime consumers originating a credit builder,traditional secured card ha

36、d a larger share of consumers scores improveScored New to Credit23Scored change defined as:Declined is 25-point decline,Maintained is-25 to+25-point change,Improved is 25-point increaseVantageScore 4.0 risk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781+Source

37、:TransUnion US consumer credit databasePercentages may not add to 100%due to roundingPost Credit Builder Origination Score Change by Product Type(Near Prime at cb to cb+6)Traditional Secured CardOpen Secured CardSecured InstallmentDeclinedMaintained51%46%Improved44%45%11%DeclinedMaintained5%73%69%Im

38、proved51%32%18%DeclinedMaintained5%69%26%Improved22%43%35%SubprimeNear primePrimePrime plusSuper prime 2024 TransUnion LLC All Rights ReservedTraditional secured card users were more likely to maintain or continue positive score migration in the long-term post originationScored New to Credit24Scored

39、 change defined as:Maintained is-25 to+25-point change,Improved is 25-point increaseSource:TransUnion US consumer credit databasePercentages may not add to 100%due to roundingNear Prime at cb:Credit Builder Origination Score Change by Product Type(cb+6 to cb+21)35%54%52%31%22%27%34%24%21%Traditional

40、 Secured CardOpen Secured CardSecured Installment100%100%100%46%65%48%DeclinedMaintainedImproved 2024 TransUnion LLC All Rights ReservedFinally:1.Thin file consumers are defined as having one trade on file or two of the same product types 2.New to credit consumers oldest trade on file is 25-point de

41、cline,Maintained is-25 to+25-point change,Improved is 25-point increaseVantageScore 4.0 risk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781+Source:TransUnion US consumer credit databasePercentages may not add to 100%due to roundingPost Credit Builder Originati

42、on Score Change by Product Type(Subprime at cb to cb+6)Traditional Secured CardOpen Secured CardSecured InstallmentDeclinedMaintained27%71%Improved22%39%39%DeclinedMaintained15%83%Improved19%35%45%DeclinedMaintained5%45%50%Improved11%30%59%SubprimeNear primePrimePrime plusSuper prime 2024 TransUnion

43、 LLC All Rights ReservedSubprime consumers who improved their scores maintained and grew at similar rates across products up to 21 months post originationScored Established27Scored change defined as:Maintained is-25 to+25-point change,Improved is 25-point increaseSource:TransUnion US consumer credit

44、 databasePercentages may not add to 100%due to roundingSubprime at cb:Credit Builder Origination Score Change by Product Type(cb+6 to cb+21)32%33%41%34%40%34%34%28%25%Traditional Secured CardOpen Secured CardSecured Installment100%100%100%67%68%59%DeclinedMaintainedImproved 2024 TransUnion LLC All R

45、ights ReservedFor consumers originating a credit builder at near prime,traditional secured card had a larger share of consumers scores improveScored Established28Scored change defined as:Declined is 25-point decline,Maintained is-25 to+25-point change,Improved is 25-point increaseVantageScore 4.0 ri

46、sk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781+Source:TransUnion US consumer credit databasePercentages may not add to 100%due to roundingPost Credit Builder Origination Score Change by Product Type(Near Prime at cb to cb+6)Traditional Secured CardOpen Secu

47、red CardSecured InstallmentDeclinedMaintained54%44%Improved39%48%13%DeclinedMaintained63%34%Improved39%45%15%DeclinedMaintained61%36%Improved23%50%26%SubprimeNear primePrimePrime plusSuper prime 2024 TransUnion LLC All Rights ReservedAt 21 months post origination,two-thirds of near prime traditional

48、 secured card consumers continued to improve their scoresScored Established29Scored change defined as:Maintained is-25 to+25-point change,Improved is 25-point increaseSource:TransUnion US consumer credit databasePercentages may not add to 100%due to roundingNear Prime at cb:Credit Builder Originatio

49、n Score Change by Product Type(cb+6 to cb+21)33%49%49%36%34%33%30%18%18%Traditional Secured CardOpen Secured CardSecured Installment100%100%100%51%67%51%DeclinedMaintainedImproved 2024 TransUnion LLC All Rights ReservedMore subprime consumers improve their scores in the near-and long-term whether th

50、e consumer is new to credit or not30Scored New to Credit Scored EstablishedMost subprime consumers scores increased after six months Less than half of consumers with secured installment or open secured trades maintained or improved scores long term40%60%of subprime consumers scores increased after s

51、ix monthsNear prime traditional secured card users scores improved the most six months post origination50%70%maintained or improved their score 21 months post origination 2024 TransUnion LLC All Rights Reserved2024 US Financial Services Summit31What types of products do consumers go on to originate?

52、How do credit builder consumers perform on traditional products?2024 TransUnion LLC All Rights ReservedWe looked at consumers who originated traditional credit products six months after the credit builder origination32Selection criteriaAll consumers who originated credit builder tradelines between Q

53、4 2021-Q1 2022 AND originated traditional tradelines 6-12 months after the credit builder tradeVantageScore 4.0 from cb to cb+6Declined:+25Performance evaluated at t+9:Bad rate:Ever 60+DPD rateCredit BuilderOriginated new tradelineTraditionalOriginated new tradeline within six months of credit build

54、er tradelineQ4 2021cb+6cb+12cbtQ1 2022-t+9Benchmark:US consumer credit population delinquency rate on traditional tradelines:Q2 2022Q1 2023 cohort 2024 TransUnion LLC All Rights ReservedCredit builder consumers originate traditional products at similar rates to the general population33*Based on a ra

55、ndom sample of 1M non-credit builder consumers between Q1-Q2 2022Source:TransUnion US consumer credit databasePercent of Non-Credit Builder Consumers Originating Traditional Products over Six Months*Percent of Credit Builder Consumers Originating New Products(cb+6 to cb+12)SubprimeNear primePrime37%

56、47%41%Traditional Secured CardOpen Secured CardSecured Installment46%30%50%2024 TransUnion LLC All Rights ReservedBankcard utilization is higher on average for credit builder consumers,specifically open secured and secured installment users34Credit Builder Consumers Originating New Products(cb+6 to

57、cb+12)*Source:TransUnion US consumer credit databaseSubprimeNear primePrime82.4%61.3%41.2%Benchmark:Non-Credit Builder Consumers as of Q2 2022Traditional Secured CardOpen Secured CardSecured Installment63.6%92.3%82.9%Average Bankcard Utilization*Risk tier is as of cb+12VantageScore 4.0 risk rangesSu

58、bprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781+2024 TransUnion LLC All Rights ReservedOpen secured card users bankcard utilization outpaces all other groups of subprime consumers35Source:TransUnion US consumer credit databaseTraditional Secured CardOpen Secured CardSe

59、cured Installment83.5%106.4%95.9%Average Bankcard Utilization for Credit Builder Consumers Originating New Products(cb+6 to cb+12)*:SubprimeVantageScore 4.0 risk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781+*Risk tier is as of cb+12*Based on a random sample

60、of 1M non-credit builder consumers between Q1-Q2 202282.4%Average utilization for subprime consumers without credit builder trades*2024 TransUnion LLC All Rights ReservedAmong near prime consumers,bankcard utilization for traditional secured card users is lower than non-credit builder consumers36Sou

61、rce:TransUnion US consumer credit databaseTraditional Secured CardOpen Secured CardSecured Installment53.6%63.1%61.1%Average Bankcard Utilization for Credit Builder Consumers Originating New Products(cb+6 to cb+12)*:Near primeVantageScore 4.0 risk rangesSubprime=300600,Near prime=601660,Prime=661720

62、,Prime plus=721780,Super prime=781+*Risk tier is as of cb+12*Based on a random sample of 1M non-credit builder consumers between Q1-Q2 202261.3%Average utilization for near prime consumers without credit builder trades*2024 TransUnion LLC All Rights ReservedPrime credit builder consumers,across prod

63、uct types,have lower bankcard utilization than non-credit builder consumers37Source:TransUnion US consumer credit databaseTraditional Secured CardOpen Secured CardSecured Installment26.2%31.2%34.6%Average Bankcard Utilization for Credit Builder Consumers Originating New Products(cb+6 to cb+12)*:Prim

64、eVantageScore 4.0 risk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781+41.2%Average utilization for prime consumers without credit builder trades*Risk tier is as of cb+12*Based on a random sample of 1M non-credit builder consumers between Q1-Q2 2022 2024 TransU

65、nion LLC All Rights ReservedAmong credit builder users opening traditional loans,credit cards are most popular followed by auto and unsecured personal loans38Source:TransUnion US consumer credit databaseTypes of Traditional Products Opened by Credit Builder Users Within Six months(cb+6 to cb+12)25%1

66、1%19%9%4%6%7%4%6%6%4%9%3%2%4%4%4%5%1%0%1%Traditional Secured CardOpen Secured CardSecured InstallmentCardPrivate labelAutoUnsecured personal loanSecured personal loansStudent loanMortgage 2024 TransUnion LLC All Rights Reserved2024 US Financial Services Summit39How do credit builder consumers perfor

67、m on traditional products?2024 TransUnion LLC All Rights ReservedConsumers opening auto loans after open secured card or secured installment consistently perform worse across score tiers(1/2)40VantageScore 4.0 risk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=78

68、1+Source:TransUnion US consumer credit databaseIndexed Auto 60+DPD Performance at Nine Months on Book by VantageScore 4.0 Range0 x1x2x3x4xVantageScore 4.0 RangeIndexed Performance=500501-525525-550551-575576-600601-625626-650651-7001xGeneral Population 2024 TransUnion LLC All Rights ReservedConsumer

69、s opening auto loans after open secured card or secured installment consistently perform worse across score tiers(2/2)41VantageScore 4.0 risk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781+Source:TransUnion US consumer credit databaseIndexed Auto 60+DPD Perfor

70、mance at Nine Months on Book by VantageScore 4.0 Range0 x1x2x3x4xVantageScore 4.0 RangeIndexed Performance=500501-525525-550551-5751.2x1.9x1.5x576-600601-625626-650651-7001xGeneral PopulationTraditional Secured CardOpen Secured CardSecured Installment 2024 TransUnion LLC All Rights ReservedFor bankc

71、ard,open secured card performance is consistently worse,while other products are more consistent with the general population42VantageScore 4.0 risk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781+Source:TransUnion US consumer credit databaseIndexed Bankcard 60+

72、DPD Performance at Nine Months on Book by VantageScore 4.0 Range0 x1x2x3x4xVantageScore 4.0 RangeIndexed Performance=500501-525525-550551-5750.8x1.5x1.1x576-600601-625626-650651-7001xGeneral PopulationTraditional Secured CardOpen Secured CardSecured Installment 2024 TransUnion LLC All Rights Reserve

73、dFor UPLs,credit builder consumer performance is generally worse than the general population especially for higher scored consumers43VantageScore 4.0 risk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781+Source:TransUnion US consumer credit databaseIndexed Unsec

74、ured Personal Loan(UPL)60+DPD Performance at Nine Months on Book by VantageScore 4.0 Range0 x1x2x3x4xVantageScore 4.0 RangeIndexed Performance=500501-525525-550551-5751.4x2.1x1.7x576-600601-625626-650651-7001xGeneral PopulationTraditional Secured CardOpen Secured CardSecured Installment 2024 TransUn

75、ion LLC All Rights ReservedThe personas to compare:1.Thin file consumers are defined as having one trade on file or two of the same product types 2.New to credit consumers oldest trade on file is+25 points and moved into 601-660 score bandGeneral population 540600Credit builders who maintainedvsGene

76、ral population 601630Credit builders who improved to 601630vscbBetween cb+6 and cb+12(t)cb+6t+9General population 2024 TransUnion LLC All Rights ReservedIn the nine months after credit builder users opened a traditional product,open secured card users had the highest delinquencies(1/2)Scored New to

77、Credit46Score change defined as:Maintained is-25 to+25-point change,Improved is 25-point increase and moved into 601-660 score bandVantageScore 4.0 risk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781+Source:TransUnion US consumer credit databaseTraditional Pro

78、duct Performance at Nine Months on Book by Credit Builder Product Type:Percent 60+DPD at Account LevelAutoBankcardUnsecured Personal Loan4.3%1.7%Maintained,540-600Improved to 601-660General Population5.9%2.8%Maintained,540-600Improved to 601-6603.0%1.6%Maintained,540-600Improved to 601-660 2024 Tran

79、sUnion LLC All Rights ReservedIn the nine months after credit builder users opened a traditional product,open secured card users had the highest delinquencies(2/2)Scored New to Credit47Score change defined as:Maintained is-25 to+25-point change,Improved is 25-point increase and moved into 601-660 sc

80、ore bandVantageScore 4.0 risk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781+Source:TransUnion US consumer credit databaseTraditional Product Performance at Nine Months on Book by Credit Builder Product Type:Percent 60+DPD at Account LevelAutoBankcardUnsecured

81、 Personal Loan4.3%1.7%3.0%9.7%8.2%7.9%5.5%Maintained,540-600Improved to 601-6605.1%General PopulationTraditional Secured CardOpen Secured CardSecured Installment5.9%2.8%4.0%11.5%9.0%8.3%6.4%Maintained,540-600Improved to 601-6606.1%3.0%1.6%3.5%5.5%4.4%4.9%3.8%Maintained,540-600Improved to 601-6602.8%

82、2024 TransUnion LLC All Rights ReservedScored established open secured card users typically had higher delinquencies on traditional productsScored Established48Score change defined as:Maintained is-25 to+25-point change,Improved is 25-point increase and moved into 601-660 score bandVantageScore 4.0

83、risk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781+Source:TransUnion US consumer credit databaseTraditional Product Performance at Nine Months on Book by Credit Builder Product Type:Percent 60+DPD at Account Level4.3%1.7%6.3%5.1%5.7%4.2%Maintained,540-600Impr

84、oved to 601-6604.2%2.8%General PopulationTraditional Secured CardOpen Secured CardSecured Installment5.9%2.8%8.1%4.6%5.7%3.8%Maintained,540-600Improved to 601-6604.7%3.1%3.0%1.6%3.7%2.9%5.0%3.2%4.1%3.6%Maintained,540-600Improved to 601-660AutoBankcardUnsecured Personal Loan 2024 TransUnion LLC All R

85、ights ReservedAcross consumer types,open secured card users had the highest delinquency rates,followed by secured installment users49Scored New to Credit Scored EstablishedNew-to-credit consumers had higher delinquencies than similarly scored consumersTraditional secured card consumers were closer t

86、o benchmarks but still had higher delinquencyScored consumers performed closest to their risk bands 2024 TransUnion LLC All Rights ReservedCredit builders who improved their scores and had thicker files did the best on delinquencies but still trailed national benchmarksSummary of findings Credit act

87、ivityCredit builder consumers are not significantly more credit active than other consumersOverall performanceCredit builder users tend to have worse performance than benchmarks regardless of productBy personaCredit builder users with thicker files have better performance than thinner-file usersBy s

88、core migrationCredit builder users who had improved their scores had better performance versus benchmarks than consumers who did not improve their scores50 2024 TransUnion LLC All Rights ReservedWe identified potential markers of higher-risk credit builder profiles,but further segmentation is needed

89、 to identify lower-risk consumersSummary of Lower v.Higher-Risk Credit Builder ProfilesHigher RiskLower RiskCredit historyNew-to-credit/thin-file consumerScored established consumer with thick fileRisk tier at credit builder originationSubprime at credit builder origination more likely to have impro

90、ved scoreAbove subprime at credit builder origination less likely to have improved scoreCredit builder productOriginated open secured card or secured installment productOriginated traditional secured card51Source:TransUnion analysis 2024 TransUnion LLC All Rights Reserved52Credit builder users impro

91、ve their scores and access other loans,but delinquency varies by product and consumer typeConsumer use of credit builder products is growing,and most users are below primeMost credit builder consumers had traditional products especially credit cards,student and auto loans prior to originating a cred

92、it builder,and they open card,auto and personal loans post originationMore new-to-credit users of credit builder products improve their scores in the near-and long-term compared to thicker-file scored established credit builder usersA minority of credit builder consumers are unscored,but after origi

93、nation,they mostly become near prime and primeDelinquencies for credit builder users are higher than non-credit builder users,with open secured card users typically having the highest rates;however,thicker-file scored established credit builder consumers achieve better performance compared to thinne

94、r-file users 2024 TransUnion LLC All Rights Reserved532024 US Financial Services Summit 2024 TransUnion LLC All Rights Reserved54 Please share your feedback with us!Your perspective is important and will help us improve the structure and content of future meetings.You can access the Session Survey v

95、ia this QR Code.There are 3 questions for each Session.Once completed,you can close the browser.After the next session,you scan the QR Code again,and the survey will open where you left off.Session Survey 2024 TransUnion LLC All Rights Reserved2024 US Financial Services SummitAppendix55 2024 TransUn

96、ion LLC All Rights ReservedFor subprime consumers,new-to-credit consumers improved scores at higher rates than consumers with thicker files 56Scored change defined as:By(cb+6)Improved is 25-point increase;By(cb+21)Maintained is-/+25-point change from(cb+6)score,Improved is 25-point increase from(cb+

97、6)scoreVantageScore 4.0 risk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781+Traditional secured cardScored New to Credit:SubprimeScored Established:SubprimeImprove+6mMaintain+21mImprove+21m28%64%31%Improve+6mMaintain+21mImprove+21m31%58%34%Improve+6mMaintain+2

98、1mImprove+21m30%47%26%Open secured cardSecured installmentImprove+6mMaintain+21mImprove+21m34%59%34%Improve+6mMaintain+21mImprove+21m40%45%28%Improve+6mMaintain+21mImprove+21m34%39%25%2024 TransUnion LLC All Rights ReservedThe percentage of near prime credit builder users who improve and maintain th

99、eir scores lags subprime users57Scored change defined as:By(cb+6)Improved is 25-point increase;By(cb+21)Maintained is-/+25-point change from(cb+6)score,Improved is 25-point increase from(cb+6)scoreVantageScore 4.0 risk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prim

100、e=781+Traditional secured cardScored New to Credit:Near primeScored Established:Near primeImprove+6mMaintain+21mImprove+21m31%35%34%Improve+6mMaintain+21mImprove+21m22%18%24%Improve+6mMaintain+21mImprove+21m27%11%21%Open secured cardSecured installmentImprove+6mMaintain+21mImprove+21m36%26%30%Improv

101、e+6mMaintain+21mImprove+21m34%15%18%Improve+6mMaintain+21mImprove+21m33%13%18%2024 TransUnion LLC All Rights ReservedScored credit builder users have lower delinquencies than new-to-credit users,especially for auto and bankcard58Scored change defined as:Maintained=score change of-25 to+25 points;Imp

102、roved=score change+25 points and moved into 601-660 score bandVantageScore 4.0 risk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781+Comparison of Delinquency Rate for Nine Months on Book for Upper Subprime and Near Prime60+DPD at Account LevelScored New to Cred

103、itScored EstablishedCredit builderScore change groupAutoBankcardUPLAutoBankcardUPLTraditional secured cardAt(t+9):Maintained5.1%6.1%2.8%4.2%4.7%3.7%At(t+9):Improved3.0%4.0%3.5%2.8%3.1%2.9%Open secured cardAt(t+9):Maintained 9.7%11.5%5.5%6.3%8.1%5.0%At(t+9):Improved8.2%9.0%4.4%5.1%4.6%3.2%Secured ins

104、tallmentAt(t+9):Maintained7.9%8.3%4.9%5.7%5.7%4.1%At(t+9):Improved5.5%6.4%3.8%4.2%3.8%3.6%2024 TransUnion LLC All Rights ReservedIn the nine months after credit builder users opened a traditional product,open secured card users had the highest delinquencies59Score change defined as:Maintained is-25

105、to+25-point change,Improved is 25-point increase and moved into 661-720 score bandVantageScore 4.0 risk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781+Source:TransUnion US consumer credit databaseTraditional Product Performance at Nine Months on Book by Credit

106、 Builder Product Type:Percent 60+DPD at Account LevelAutoBankcardUnsecured Personal Loan1.7%0.6%3.6%2.1%4.7%7.3%3.6%2.6%Maintained,600-660Improved to 661-720General PopulationTraditional Secured CardOpen Secured CardSecured Installment2.8%1.2%2.1%4.8%7.0%4.2%2.1%Maintained,600-660Improved to 661-720

107、3.7%1.6%0.7%3.7%5.0%3.3%5.6%2.7%2.3%Maintained,600-660Improved to 661-720Scored New to CreditScored 600-660 at cb 2024 TransUnion LLC All Rights ReservedScored established open secured card users typically had higher delinquencies on traditional productsScored 600-660 at cbScored Established60Score

108、change defined as:Maintained is-25 to+25-point change,Improved is 25-point increase and moved into 661-720 score bandVantageScore 4.0 risk rangesSubprime=300600,Near prime=601660,Prime=661720,Prime plus=721780,Super prime=781+Source:TransUnion US consumer credit databaseTraditional Product Performan

109、ce at Nine Months on Book by Credit Builder Product Type:Percent 60+DPD at Account LevelAutoBankcardUnsecured Personal Loan1.7%0.6%2.6%1.7%3.1%2.2%3.0%2.1%Maintained,600-660Improved to 661-720General PopulationTraditional Secured CardOpen Secured CardSecured Installment2.8%1.2%2.6%1.7%3.1%2.1%2.8%1.

110、6%Maintained,600-660Improved to 661-7201.6%0.7%3.0%1.3%3.1%2.6%3.0%2.0%Maintained,600-660Improved to 661-720 2024 TransUnion LLC All Rights ReservedFor credit card,VantageScore,along with card utilization and average credit line parameters can help segment credit builder usersCard originated by non-

111、prime consumer4.5%Overall bad rate for general population6.2%Overall bad rate for consumers who had a credit builder productBad rate:2.8%accts:30.1%VS 4.0=562 Utilization of card in past 12 months=$471Bad rate:5.4%accts:15.6%VS 4.0=562 Utilization of card in past 12 months 87%Avg cr.line of open cre

112、dit card=562 Utilization of card in past 12 months=87%Bad rate:7.5%accts:37.7%VS 4.0=$95Bad rate:13.9%accts:7.0%VS 4.0 562 Avg cr.line of open credit card=604 Average credit line of open credit card=$389 Utilization of open credit card=$389 Utilization of open credit card=545 Average credit line of

113、open credit card=$389 Utilization of open credit card=79%Bad:5.2%accts:14 VS 4.0=545 Average credit line of open credit card$389 No of inquiries in past 12 months=545 Average credit line of open credit card=3.5Bad:6%accts:11.8 VS 4.0=$276 Number of charged-off trades in past 24 months 0.5Bad:9.8%accts:10.9 VS 4.0=$276 Number of charged-off trades in past 24 months=0.5Bad:12.5%accts:14.6 VS 4.0 545 Total credit line of open credit card$27662VantageScore 4.0 risk rangesNon-prime=300660Source:TransUnion US consumer credit database