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.

Über FICO
FICO (NYSE: FICO) ist ein führender Anbieter von Predictive Analytics und Softwarelösungen für Entscheidungsmanagement, das Unternehmen in über 90 Ländern dabei unterstützt, bessere Entscheidungen zu treffen, um Wachstum, Profitabilität und Kundenzufriedenheit zu steigern. Der zukunftsweisende Einsatz von Big Data und mathematischen Algorithmen zur Erstellung von Prognosen zum Kundenverhalten hat ganze Branchen grundlegend gewandelt. Die Analytics-Softwarelösungen und -Tools von FICO werden in den verschiedensten Branchen verwendet, um Risiken und Betrugsfälle zu verringern, profitablere Kundenbeziehungen aufzubauen, Abläufe zu optimieren und strenge regulatorische Vorgaben zu erfüllen. Many of our products reach industry-wide adoption. These include the FICO^® Score, the standard measure of consumer credit risk in the United States. FICO-Lösungen integrieren Open-Source-Standards und Cloud Computing, um so maximale Flexibilität und schnelle Bereitstellung zu ermöglichen und Kosten zu reduzieren. Das Unternehmen hilft Millionen von Menschen dabei, ihren persönlichen Kreditstatus zu verwalten. FICO: Make every decision count™.

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