Consumer Transaction Data for Credit Risk Assessments

Consumer Edge (CE), a leading global provider of anonymized consumer transaction data, empowers financial institutions and corporations with real-time insights into consumer spending behaviors. Through its Transact US dataset, which includes over 93 million credit and debit cards, CE delivers granular insights across more than 13,000 brands. This allows for timely and comprehensive evaluations of a company’s financial health.

Revolutionizing Credit Health and Risk Assessments with Transaction Data

In an evolving financial landscape, lenders and investors are seeking more accurate, real-time data to assess a company’s financial health. Traditional credit scoring models often rely on outdated or limited data, which may not reflect a company’s current financial position or risk profile. CE’s Transact US dataset fills this gap by providing near real-time visibility into consumer credit and debit spend. This gives lenders and investors a clearer, more timely view of a company’s financial performance.

CE’s Transact US Data Improves Company Credit Ratings

Credit and debit transaction data from Consumer Edge can be used to benchmark a brand’s performance vs its industry competitors. Trending dynamics—like LinkedIn’s crackdown on data scraping—have made it increasingly difficult for credit rating agencies, PEs, VCs, and others to find reliable proxies for assessing credit risk and scoring company health. CE’s transaction data avoids this limitation. It also isn’t restricted to publicly traded companies; it tracks small, emerging, and privately held businesses as well.

When it comes to credit rating assessments, the most impactful indicators include:

Near Real-time Brand Spend: One of the most significant advantages of using CE’s transaction data is the ability to assess a company’s financial health. Traditional credit ratings are often based on quarterly or annual reports, which may not accurately reflect current financial conditions. By using near real-time transaction data, financial institutions can continuously monitor a business’s financial performance, ensuring that credit ratings and risk assessments are always up-to-date.

Customer Retention: Retaining existing customers is often indicative of delivering a great customer experience and a brand’s ability to stay on-trend and top of mind. CE’s transaction data tracks customer loyalty, repeat purchases, and the frequency of shopper engagement with a brand. A high rate of customer retention, indicated by frequent repeat transactions compared to its industry competitors, can signal a company’s ability to generate consistent performance into the future. Financial institutions may view this as an indication of financial stability and long-term growth potential, further enhancing the brand’s creditworthiness. Conversely, low customer retention when compared to peers can highlight a brand’s struggles to stay relevant and top of mind with consumers.
Customer Acquisition: Similar to customer retention, CE’s transaction data offers valuable insight into a brand’s customer acquisition efforts. Strong performance in acquiring new customers and growing the overall shopper base can give lenders confidence in a brand’s future growth potential. Conversely, if a brand struggles to attract new customers, it may signal risks to its long-term financial health.

Methodology Behind CE’s Credit Health Indicator

CE’s Credit Health Indicator uses Transact US data on consumer sales and shopping behavior to rank a brand’s health relative to its industry peers. Half of the rating is based on sales growth, including recent short-term trends, medium- and long-term performance, and consistent quarterly growth. The other half comes from consumer behavior metrics like customer retention, new customer acquisition, and total customer base growth. This blend of financial and behavioral data offers a unique perspective on how a brand is performing compared to its competitors.

US Department Stores Credit Heath Indicator

Between rising prices for consumers and ongoing uncertainty around trade policy, the retail environment has been especially challenging. Brand performance in this landscape has varied widely. Some retailers have successfully expanded their geographic footprint. Others have been forced to close locations.

TJX’s TJ Maxx and Marshalls are among the highest rated brands in the Department Store category. Their strong sales growth trends and category-leading customer retention drive these high marks. Conversely, PE-owned JCPenney is among the lowest rated brands. It shows below-category average sales growth and ongoing struggles with customer retention. Saks Global’s Saks Fifth Avenue, Saks Off 5th, and Neiman Marcus brands were also rated low using CE data.

Despite a number of positive indicators—like Saks Fifth Avenue’s 5-year sales CAGR and Neiman Marcus’ new customer acquisition—these brands rated below average across most other credit health indicators.

US Footwear and Athletic Apparel Credit Health Indicator

Further diving into the retail landscape, the performance of Footwear and Athletic Apparel brands has been top of mind. Rising trade pressures and new tariff policies have added to the uncertainty.

From both a sales growth and customer behavior perspective, New Balance is well-positioned. It leads the category, driven by strong new customer acquisition. Comparatively, Adidas’ sales growth has struggled to keep pace. Although customer retention has been strong, weak customer acquisition has contributed to below-average DTC sales.

Partner with Consumer Edge to Leverage Transaction Data Insights

Integrating credit and debit card data into corporate credit ratings and risk assessments can significantly improve how businesses are evaluated by lenders and investors. By using transaction data from Consumer Edge, businesses gain real-time, granular insights into consumer spending and shopping habits. This adds accuracy, context, and a more complete view of a brand’s financial health.

Unlock the potential of alternative data with Consumer Edge, from home improvement trends to apparel spending to restaurant insights. Dive deeper into the market landscape, enhance decision-making, and drive growth by leveraging insights that traditional data might miss. Transform your strategies today and set your business on the path to smarter, more profitable outcomes.

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