Prospecting with Credit Score
By Brian Berg

Mortgage lenders and auto dealers benefit two-fold by targeting credit worthy clients.  Here’s how…

Using credit data to target mortgage and car buyer prospects works in two ways.  Not only can we pinpoint a likely responder to a mail piece, but we can also target prospects who will qualify for financing, thus eliminating both time and money spent on shoppers who ultimately will not become buyers.

Credit Data Limitations
Trans Union, Equifax, and Experian all release credit score data for marketing purposes.  But accessing this data requires the mailer to provide proof that the offer and mail piece satisfy FTC set guidelines.

Prospecting for Loan Application
Both Mortgage Lenders and Auto Dealerships have similar marketing strategies.  In essence, auto dealers sell cars, but prospect as if they are selling auto loans.  As with mortgage refi’s, not everyone will qualify for a mortgage loan.  For this reason we use credit data to identify not only people who might be in the market for a new loan, but also to pinpoint only those prospects who would qualify for your financing, thus saving you time and money.

Lender and Dealer Strategies

Mortgage Lender Strategy
Ideally, we would want to reach a homeowner who’s currently shopping a debt-consolidation, payment or rate reduction refinance.  Currently, those businesses capturing this kind of data sell them as leads and at a premium price, one lead at a time.  For mortgage mailing or telemarketing purposes, the best target audience is mortgage holders who look like they are good candidates for a refinance product because of various credit indicators.  A proper mail piece brings to light the benefits of refinancing.  If done correctly, the refinance question is a simple one.  The prospect will either save money or will not.  At any given time, only a portion of the mortgage holders will actually benefit from refinancing their existing mortgage.  There are many selectable elements available to target the ideal mortgage prospect.  As an example, those who have a revolving loan balance are paying higher rates of interest on their overall debt making them ideal refinance prospects.  Additionally, selecting individuals with a qualifying credit score helps increase sales conversion. If the lenders underwriting department determine that they cannot work with candidates of scores less than 550, we simply select only those higher than 550, thus mailing only to those prospects that will truly make good customers. Not only will the lender save on direct mail promotion costs, but also the cost of employee’s working on bad loans we have eliminated.

Auto Dealers Strategy
The same holds true for dealerships. All dealerships have finance departments with credit score thresholds. Targeting the right credit score will help us keep the sales staff talking only to those car shoppers who can qualify for the auto loan. Using various credit elements, we can increase the likelihood that the prospect is in the market for a new car. As an example, we might select only those people who have at least 50% of there auto loan paid. Here we eliminate those prospects that have recently purchased a vehicle, as well; those who might have trouble paying off their existing auto loan with the trade in value of their vehicle. We may also select those who are within 6 months of their current lease expiration. For those drivers whose lease is coming due, the driver has two options, i.e., trade into a new vehicle, or buy out their currently leased vehicle. Six months remaining is also attractive because a typical finance department can easily squeeze someone into a new vehicle before the expiration without any out of pocket money, thus making them also a very good prospect to mail.