Varieties and Offerings of Credit Bureaus

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As the credit bureaus develop products, they begin to see additional ways of using them to complement other new or existing products and services. Trans Union is beginning to promote the use of its Horizon bankruptcy-scoring tool with its Empirica delinquency-scoring model, which focuses on the level of risk tied to accounts 90 or more days past-due. "When a customer uses Horizon with Empirica, they can focus on general delinquencies but also bankruptcies at the same time," Powers says. "We feel it's time to look at both." The bureaus are getting into far more than sophisticated scoring models, however, in a trend borne out by their development of strategies to also offer database marketing services.Credit Bureaus: EquifaxEquifax recently exited the insurance-services business to better concentrate on financial services, and it has acquired additional card authorization and processing operations and entered into alliances in credit bureaus reporting and target marketing. "That really puts a focus just on the financial-services part," a spokesman for Equifax says, adding that many of the company's newest products-for modeling, risk scoring, and bankruptcy predictions-have come out of its Decisions Solutions unit. "We've elected to go from a credit bureau to a multi-faceted global company," says Thomas F. Chapman, Equifax chief executive. With some 50 acquisitions in the past several years, Equifax now operates in 40 countries and derives about 25% of its revenue from outside of the U.S. At the same time, it has reorganized itself to offer risk-management products ranging from prescreening tools to collections-scoring and customer-service models.The Alliances of Credit BureausIts new alliances of credit bureaus with HNC Software Inc. and VNU Marketing and Information Services are designed to position the credit-reporting agency as a provider of comprehensive, high-end information services. With HNC, Equifax is integrating the software company's neural-network technology for finding patterns in pools of data with its own risk-management and card-processing systems. The agreement with VNU Marketing, which coincided with VNU's acquisition last year of Equifax National Decision Systems, is intended to co-develop marketing and analytical tools. National Decision Systems, whose products are still listed through a direct link to Equifax's World Wide Web site, provides a broad range of marketing tools, including 65 databases that sort information in several categories of demographics, consumer spending, and business operations.Credit Bureaus: Electronic-Payment SoftwareEquifax Card Solutions, an electronic-payment software developer formerly known as First Bankcard Systems, or FBS, is developing enhancements to its software for card issuing, collections, and merchant processing in credit bureaus. Recently, Equifax announced plans to expand Card Solutions' product line with its intended purchase of Hahira, Ga.-based Goldleaf Technologies Inc., a developer of electronic banking software.In a forthcoming relational database system, Card Solutions will offer the ability to separate demographic information by individual credit card holders. The ability to identify activity on a "plastic-byplastic basis," the company says, will better enable credit card companies and merchants to analyze cardholder purchasing activity for marketing purposes.Credit Bureaus: Card SolutionsCard Solutions is also developing the capability for so-called transaction-level pricing, which provides the ability to process credit card transactions differently for different types of activity, such as separate major-purchase balances, deferred payments, and deferred interest calculations in addition to the more typical revolving balances in which everything is lumped together and the finance charge derived therein. Eventually, Equifax says, its customers will be able to define different authorization options for each transaction.   

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