Neiman Marcus 2008 Annual Report Download - page 653

SCHEDULE 3.2(g)(i)
Private Label Account Profiles
Bank may make changes to the Risk Management Policies with respect to a channel in response to changes in the credit profiles for
Account applicants in such channel if the Population Stability Index (PSI) based on the Fair, Isaac Score indicates a change in excess
of [***] in such channel for two consecutive months
• For purposes of determining the PSI benchmark: NMG will send to Equifax the through-the-door (TTD) application
population for the most recent quarter
• Equifax will access both NMG's and Bank's current scoring methodology and develop a cross-talk table to translate NMG's
current scores to Bank's scores
• The scores will be used to develop the PSI
The objective of the Population Stability Index (PSI) is to answer the question Is the current application population scoring differently
from a Benchmark population'. The PSI is designed to indicate the level of change in the applicant population. The Index can be
interpreted as follows:
[***]
The NMG application file will be used to benchmark the PSI by Next Gen, FICO Score and New Account Scorecard Score if
contractually allowed by FICO. The historical approval rates for NMG for the past 12 months will be used to indicate the seasonal
trend in credit quality and approval experience by NMG. The information would be segmented by channel and monitored on a
monthly basis.
The PSI would be developed jointly over the first six months following the Effective Date with the Risk Management Policies
remaining unchanged during this time.
Attached is an example of a PSI.