Fayetteville, Ark.-based Arvest Bank is using underwriting tools from TransUnion to assess current customers on their suitability for financial products in the future.

The bank, which has more than $19 billion in total assets, is trying to reach customers who might not currently qualify for the loans based on their traditional FICO scores. Instead, Arvest is using TransUnion data to predict how risky a customer will be 18-24 months in the future.

According to Doug Heck, executive director of consumer lending at Arvest Bank, “trended data” helps Arvest target customers beyond its brick-and-mortar footprint. It pulls from traditional credit bureau information, including how often a customer pays their credit cards in full and how many accounts they open. In turn, the TransUnion tool predicts whether that person’s score will improve or deteriorate.

“A static FICO store might not tell the whole story. The trended data helps us understand credit behaviors much better than a static score,” Heck said. “It allows us to dig deeper into the available pool of customers and serve more of them without increasing our risk.”

The level of risk the institution will take is determined by the bank, which then uses direct mail to reach out to leads. Heck said it takes about 15-20 minutes to get someone set up with a consolidated loan over the phone following direct mail outreach. Once a customer is approved, they can make payments online.

Heck said the consolidated loans are not necessarily designed for consumers in dire financial circumstances. Instead, the bank is marketing these products to individuals who are looking for a way to consolidate debts like unpaid credit cards. Through the consolidated loans, Arvest can underwrite customers for up to $30,000 with APRs ranging from 6.99% to 20.99% based on their risk. According to CreditCards.com, the average APR on credit cards is 17.25%. 

See also: TransUnion Fights ‘Loan Stacking’ and Synthetic Identities with New Tool

Gene Volchek, the senior vice president of global data science and analytics for TransUnion, said the company employs more than 200 data scientists to help banks manage data and analytics. 

According to Leslie Parrish, a senior analyst at Aite Group’s retail banking practice, Arvest’s use of trended credit data can help the bank look beyond traditional credit scores, which she called “more of a lagging indicator.”

“If Arvest can spot consumers on a financial upswing before their competitors, they can increase their market share without incurring much, if any, additional risk,” Parrish said.

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