Annual Consumer Spending | Annual Credit Card Spend | Experian TAPS

Experian TAPS^SM - How It Works

Algorithm Development - Annual Consumer Spending

Experian TAPS^SM is the first commercially available algorithm that uses credit data to calculate annual consumer spending.

Algorithm calculates the last 12 months of total card spend
Validated on the accounts of multiple card issuers and network trade lines
TAPS is complementary to Vantage Score, credit line strategies and utilization and thus can rank within sub-segments.

Development

Does it work? Predicted Consumer Spend vs. Actual Consumer Spend

An independent validation sample was scored and compared with actual consumer spend over 10 vintages of 12 months: R²= .78
A similar validation on a different issuer was also conducted: R²= .87
R²or “Coefficient of Determination” is a measure of the proportion of variability that two variables share, or in other words how much one can be explained by the other.
The Coefficient of Determination above of .87 means that approximately 87% of the variability of each variable is shared with the other.

Accurately captures annual consumer spend

The TAPS algorithm discriminates consumer spend, accurately and independent of balances, with R²of 0.75-0.85

Validation

Complements income models

TAPS varies significantly within Income Insight bins

Will allow targeting across multiple risk bands

VantageScore is not correlated with consumer spend. TAPS is a necessary complement to a risk score.

Use with bank products

Deposit balances are significantly correlated with TAPS.

HELOC balances are also correlated with TAPS.

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Predicted spend vs. actual spend

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