Consumer credit reference agency, Callcredit, has launched a new geodemographic credit risk tool, which pledges to provide more accurate data than the traditional systems.
GeoRisk combines credit risk factors such as county court judgements (CCJs) and bankruptcy records with demographic information such as unemployment data, property values and home ownership for specific postcode areas.
Callcredit cites an example of two postcode areas in Nottingham which share the same geodemographic classification ‘ young single people living in private accommodation. One has six times the national average number of CCJs while the other has less than half the national average.
Graham Lund, head of strategic products at Callcredit, said: ‘Postcodes with the same geodemographic classification can be very dissimilar in terms of the number and average value of CCJs they contain, giving them a different risk profile. Similarly, the household composition can be different. GeoRisk will enable companies to make more accurate postcode based targeting decisions and allow them to positively select on the basis of credit risk as well as desired response level.’
Lenders could use GeoRisk to target potential customers, by obtaining information from specific postcodes.
Lund added: ‘Until now marketeers have made targeting decisions solely on the basis of geodemographic systems. Al-though these take into account credit-risk factors, they categorise consumers across the country, and identify which of around 50 different categories best describes their postcode. With GeoRisk, companies can cross-reference the credit-risk data against the geodemographic data to further segment the postcode groupings. GeoRisk will reveal nuances in the detailed data that has not previously been available from such packages.’