Digital Channels Have Their Challenges
Historically, credit marketing has largely focused on delivering firm offers of credit to tailored Prescreen lists via direct mail, and more recently via email. The qualified consumer receives the offer, submits their interest and consent, and the request for credit is on its way.
Now, credit marketers are experimenting with digital channels, such as display ads, mobile ads and apps, social, and more. Few of these can be used to deliver an immediate, firm offer of credit. Therefore, consumers often have to take the extra step of identification confirmation before a firm credit offer is presented. This makes it trickier to engage the consumer and move them toward a new line of credit.
Similarly, when consumers visit your website seeking a new credit card or loan options, they may not get beyond the exploratory browsing phase. It can be a challenge to motivate them to get more details and actually apply. Oftentimes, they don’t want to enter too much personal information, so they abandon their effort to get new credit. Furthermore, if they don’t qualify, that could negatively impact their credit score.
Empowering Consumers About Their Credit
Credit marketers can now offer consumers a new way to take ownership of their credit. It’s kind of like giving consumers a sneak peek into what is likely to happen — before they initiate an actual credit application. Consumers are more educated than ever on the effect of hard inquiries on their consumer report, so aligning with credit education ensures your ability as a credit marketer to increase take rates — and become more sticky in a consumer’s credit decision.
The sneak peek is called Prequalification of One. It works like this:
- Once a consumer clicks on a display (or other digital) ad, or sees a credit card/loan option on your website, he/she can initiate a prequalification for your card or other lending product. This is done with only a soft inquiry to the consumer’s Equifax credit file, by entering minimal Personally Identifiable Information (PII) to verify his/her identity and locate the correct consumer file.
- In real time, the credit company identifies offers that the consumer will likely qualify for and presents only those offers.
- The consumer decides if they want to accept any of the offers and initiates a full application.
Consumers Get Preliminary View with Prequalification of One
Here’s an example. When credit card issuers launch new, super-premium cards, demand is often huge. But not everyone qualifies for these cards. Sophisticated consumers understand their credit scores can often decrease with each recent hard inquiry, even if they’re not approved. With Prequalification of One, consumers get a preliminary view of whether they’ll qualify. And it’s done with only a soft inquiry, which will not impact a credit score. Meanwhile, credit issuers can take advantage of this highly-configurable solution to set parameters for each credit offer.
In addition, credit issuers can implement this solution in call centers, branches and point-of-sale systems. So at the other end of the spectrum, if a younger shopper wants to know if she might qualify for the store credit card, or qualify for a car loan while strolling the lot, she can find out almost instantaneously.
This solution sounds like a win-win for both the consumer and the credit issuer. Learn more.
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