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Why a One-Size-Fits-All Approach is a Bad Plan for Profitable Credit Decisioning

Have you ever worn something that’s one-size-fits-all? I bet it either wasn’t very comfortable or didn’t quite look right – or both. It may have served a simplistic function, but that’s likely where the satisfaction ended. I recently came across a health article that claimed the same thing applies to health and nutrition.   Fitness expert, "Biggest Loser" trainer and author Jen Widerstrom said it's important to create a diet and fitness plan based on your personality because one size does not fit all. Widerstrom related her relationship with clients to a teacher in the classroom, CNBC reported. While some students may be strong readers, others may be better in math. Knowing a student's strengths and weaknesses will help the teacher develop a successful lesson plan.   Similar logic applies to lenders and the scorecards used for credit decisioning.
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How to Leverage Analytics for Better Dealer Management and Indirect Lending

In the indirect lending space for vehicles, building good dealer relationships can be the difference between receiving a steady flow of quality loan applications or getting the scraps. This often involves dropping by once in a while with donuts and maintaining a strong on-going dialogue on how to better work together. However, lenders can also use analytics to gather more insight about their dealers. This insight can help them build better relationships with those dealers that are most beneficial to work with – as well as better manage those that are under-performing. Here are three key areas where analytics can prove to be very beneficial for your dealer management services:
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Custom Scorecards: Your Ticket to More Success

Generic credit scores on the market are a widely used tool by lenders to mitigate risk by knowing which applicants have a high likelihood of going delinquent on their payments. Each generic risk score on the market has been developed on broader populations that were built long ago on old consumer profiles. Lenders should consider if the generic score works on their specific portfolio type with their own unique customer characteristics that are indicative of their own customer payment behaviors when choosing a generic scorecard.
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