FICO Data: Number of Overlimit UK Student Credit Cards Has Fallen by 55 Percent Since 2012

Amid positive performance data, new accounts show increase in delinquencies

LONDON—June 12, 2014—FICO (NYSE:FICO), a leading predictive analytics and decision management software company, today released its quarterly UK cards data showing that the number of UK cards with overlimit balances has hit the lowest point in more than two years.

Data from the FICO^® Benchmark Reporting Service shows that the percentage of standard credit cards with overlimit balances has fallen from 2,6 percent in March 2012 to 1,9 percent in March 2014. The percentage of cards with overlimit balances also dropped for student, premium and Irish cards, with student cards falling the furthest, from 5,3 percent in March 2012 to just 2,4 percent in 2014, a 55 percent drop.

“Some of this change could be accounted for by the increase in average credit lines, which have risen over the last year by 4,6 percent,” said Stacey West, a Fair Isaac^® Advisors business consultant who works with UK card issuers. “However, the reduction in overlimit accounts is outpacing the increase in credit lines. People became more cautious with their credit cards during the economic crisis, and they are maintaining their good habits.”

The reduction in overlimit accounts was observed among all vintages of card accounts. However, new accounts now make up a higher percentage of all overlimit accounts: 3,5 percent in March 2014, compared with 2,2 percent in March 2013, a rise of nearly 60 percent.

"Our analysis also shows that the percentage of new accounts that are 30 or 60 days delinquent has increased," West reported. "More accounts opened within the last year are going delinquent, although they have smaller balances. Issuers should ensure that new accounts are given appropriate initial limits, should monitor risk and usage metrics, and should have targeted collections strategies in place. The industry standard approach is to assign specific collection treatments to accounts open six months or less, but we recommend issuers also pay special attention to accounts open six months to a year."

About FICO^® Benchmark Reporting Service
The card performance figures are part of the data shared with subscribers of the FICO^® Benchmark Reporting Service, which compares overall market performance in the UK cards market with individual card issuers’ performance. The data sample studied represents 26 million accounts, or about half of all credit cards issued in the UK, and comes from client reports generated by the FICO^® TRIAD^® Customer Manager solution in use by most UK card issuers.

Card issuers that subscribe to the FICO Benchmark Reporting Service receive a quarterly review of their portfolio compared to the industry, with 24 months’ worth of data. For greater insight, subscribers can explore the data by vintage of accounts. For information on the FICO Benchmark Reporting Service, contact Stacey West at staceywest@fico.com.

Sobre a FICO
A FICO (NYSE: FICO) é uma grande empresa de software analítico que ajuda empresas em mais de 90 países a tomar melhores decisões que levem a níveis mais elevados de crescimento, rentabilidade e satisfação do cliente. O uso inovador que a empresa faz do Big Data e de algoritmos matemáticos para prever o comportamento do consumidor está transformando setores inteiros. A FICO fornece software analítico e ferramentas utilizadas em vários setores para gerenciar riscos, combater a fraude, construir relacionamentos mais rentáveis com os clientes, otimizar operações e cumprir regulamentações governamentais rigorosas. Many of our products reach industry-wide adoption. These include the FICO^® Score, the standard measure of consumer credit risk in the United States. As soluções da FICO utilizam padrões de código aberto e computação em nuvem para maximizar a flexibilidade, acelerar a implementação e reduzir os custos. A empresa também ajuda milhões de pessoas a gerenciar sua qualidade de crédito pessoal. FICO: Make every decision count™.

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