In a world of big data, businesses have access to an overwhelming amount of information about consumers. From demographic information to debt to spending habits, virtually all aspects of our financial life is tracked.
“Basically, everything is known about us,” says Beau Henderson, CEO of financial firm RichLife Advisors in Atlanta. The challenge for companies is determining how to condense all that information to make it easily accessible and usable. To do that, various consumer reports and scores have been created.
[See: 9 Financial Tools You Should Be Using.]
While c redit scores are the most commonly known data point, it hasn’t always been that way. “Three decades ago, we didn’t even know about those,” Henderson says. However, with credit scores being used widely in loan application decisions and interest rate calculations, they have become much more visible and understood in recent years. Now, the consumer scoring industry has expanded and a new wave of under-the-radar reports provide details on a person’s mortgage claims, insurability and more.
Read on to discover little-known consumer reports and scores that may impact your financial health and how companies market their products and services to you.
Specialized credit scores. Credit scores are offered to consumers free of charge by many credit card companies, banks and websites, but those three digits may not be the same as the ones used by financial institutions. “A lender may see a score that’s a little different than that,” says Theresa Williams-Barrett, vice president of consumer loans and loan administration for Affinity Federal Credit Union in New Jersey.
The credit scoring agency FICO offers at least 29 different credit scores, including some that are specifically designed for industries such as mortgages and bank cards. Additional scores are available from the company VantageScore.
Williams-Barrett says the difference between the credit scores provided to consumers for free and those purchased by lenders can be significant. A score created for mortgage lenders for insights may weigh debt utilization and other factors differently in order to better estimate whether someone will be able to maintain payments.
An MIB Consumer File. If you’ve applied for an individual life, health or similar insurance coverage within the past seven years, you’ll have an MIB Consumer File. Maintained by the MIB Group, a membership organization for insurance companies, this record includes information such as whether a previous policy application has been denied and for what reason. Insurance companies use it to identify misinformation or omissions when reviewing a current application. Consumers are entitled to request one free copy of their consumer file each year from the MIB Group. The report can be requested either online or by phone.
An Insurability Score from the comparison site The Zebra. Unlike other scores on this list, the Insurability Score was designed to assist consumers, not insurers. Developed by the auto insurance comparison site The Zebra, the score rates users on a scale of 950 using data they provide. In addition to calculating the score, the company provides tips for improving the prospects of being approved for coverage at a lower rate. Such tips might include maintaining continuous coverage and improving credit scores.
“Our name is The Zebra because we believe in trying to make insurance black and white,” says Joshua Dziabiak, co-founder of the site. Information provided by consumers in order to receive an Insurability Score is only shared with insurers for the purposes of obtaining quotes. “We’re not in the business of monetizing data,” Dziabiak says.
[Read: 10 Simple Ways to Raise Your Credit Score.]
A SmartLinx person report. Offered by the company LexisNexis, this report gathers data from 13,000 proprietary and public sources to determine how individuals are connected. It includes a personal summary, including a physical description, alongside licensing information, business connections, arrest history and other data. The company touts the report as a way for companies to avoid fraud, regulatory risk and money laundering. Consumers can request a copy of the data LexisNexis uses to create its personal reports.
CLUE reports. LexisNexis also offers insurers several Comprehensive Loss Underwriting Exchange, or CLUE, reports. “This is basically a claims report,” Dziabiak says. With versions available for auto, property and commercial coverage, these reports let insurers see what claims have been made and how much has been paid out within the past seven years.
“Most of the major insurance companies contribute to it,” Dziabiak notes. LexisNexis will provide consumers a free copy of their reports every 12 months. Consumers can request a copy online or through the mail. Your name, birthdate and Social Security number are required to retrieve a report.
A-PLUS Property report. The A-PLUS Property report serves the same purpose as the CLUE report. Offered by the data analytics firm Verisk, the report provides claims data and can analyze it to flag certain losses. The company can also help insurers determine whether a particular applicant has a claims history that warrants further review. Verisk provides consumers with one free A-PLUS Property report every 12 months.
A ConsumerView profitability score. A product from the credit reporting bureau Experian, the ConsumerView Profitability Score is intended for those sending “invitation-to-apply” marketing materials, such as credit card offers. It identifies households most likely to pay their debts and ranks them on criteria like their expected profitability and likelihood of responding to an offer and being accepted.
Discretionary Spending Index. The Discretionary Spending Index is another product designed for marketers. Created by the consumer credit reporting agency Equifax, the index scores households on a 1,000-point scale using a combination of known client data, such as income and investment assets, alongside other indicators to determine discretionary spending potential. The ranking isn’t meant to be used for lending decisions, but rather to identify clients who might be receptive to upselling or cross-selling.
[See: What to Do If You’ve Fallen (Way) Behind on Your Credit Card Payments.]
DonorScores from the research and analytics company DonorTrends. Even your potential to donate to a good cause is ranked and scored in today’s world. DonorTrends, an independent research company, uses analytics to create scores and help fundraisers identify which people are most likely to donate and then give more. The scores rely on data already known by a charitable organization and don’t pull information from third-party sources.
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Beyond the Credit Score: 9 Data Reports You Don’t Know About originally appeared on usnews.com
