Harry Gambill jumps out of airplanes, rides motorcycles, and goes white-water rafting. But he said running Trans Union Corp. provides the most thrills.
"It's like being in a free fall," said Mr. Gambill, 52, the Chicago- based credit bureau's president and chief executive officer.
The biggest stunt this adventurer will attempt this year is to keep Trans Union growing in its highly mature industry. Sales of credit reports, Trans Union's core business, have been rising in parallel with loan demand, but these revenues are a dwindling portion of the company's total.
Trans Union is on an aggressive campaign to enter new lines of business. But so are its two closest competitors, Equifax Inc. and Experian Inc. All three are focusing their diversification efforts on offering customers a broader array of information-based products.
The new course Trans Union has set for itself-it includes seeking out acquisitions and expanding internationally-has Mr. Gambill on the edge of his seat.
"If you are as paranoid as I am about the business, you always think you are at a crossroads. We have new competitors coming out of nowhere," Mr. Gambill said.
The Arkansas native's unpretentious style and casual manner stand in contrast to the rather standard corporate office environment at Trans Union. Where the job title appears on most people's business cards, Mr. Gambill's says, "Does Neat Stuff."
One neat trick he is attempting is to shatter the perception that Trans Union is the smallest of the three credit bureaus. Though authoritative market-share data are lacking, analysts consider Equifax the largest, Experian second, and Trans Union third.
Mr. Gambill believes Trans Union is as large as Experian in the businesses in which they compete.
"Trans Union, Equifax, and Experian are very similar in size," he said. "We think we are gaining market share. We started to feel that our customers might perceive us as the No. 3 provider, and we are just not."
Size issues aside, Trans Union had a calm 1997 compared to its rivals. Equifax shed two sizable businesses, and Experian, the successor of TRW, was bought and sold twice in two months.
"I'm glad that they had to undergo that kind of stress and strain and road shows for the investment community," Mr. Gambill said.
Trans Union is free of those "stakeholder" worries. It is part of the privately held Marmon Group, the $5.8 billion conglomerate controlled by Jay Pritzker and his brother, Robert, who are ranked 14th and 15th on Forbes magazine's list of the 400 richest people in America.
Trans Union is part of a diverse portfolio of holdings that include the Hyatt properties, a company that makes railroad tank cars, and another that makes chicken-hatching incubators.
That corporate shell does not protect Trans Union from competitive pressures. Four years ago, 85% of its revenues came from credit report sales; now the company earns less than 50% from that source.
Though Trans Union sold 20% more reports in 1997 than the year before, all signs point to a conclusion that the industry is being saturated.
"Revenues of the credit business might be growing at about 5% to 7%, so the growth comes from more exciting applications" in which credit information is combined with other data, said Brent Wouters, a Robinson- Humphrey Co. analyst who follows Equifax.
One area in which Trans Union is rapidly expanding is in developing models for lenders.
Trans Union announced a partnership last year with May & Speh to form the Trans Union Modeling Group. The alliance is designed to give lenders client-specific customer segmentation tools.
The key executives of May & Speh, Barbara Thornton and John Coffman, were founders of MDS in Atlanta, a credit information and modeling company that was acquired by CCN Group and thus became part of Experian.
Since 1987, Trans Union has also had a joint venture with Fair, Isaac & Co., the pioneer of credit scoring. The partnership produces models that are made available to Equifax and Experian.
These models are produced by a credit research partnership of about 10 major lenders, Trans Union, and Fair, Isaac. The lenders meet periodically to discuss what kinds of tools they need in order to understand their customers better.
Since Trans Union develops the models, its own customers are given the right to use them for up to 120 days before they go to the rest of the industry. Trans Union also is the laboratory for model-testing.
"You might argue that we just make a market for the other guys," Mr. Gambill said. "But the hope is that the customer will stay with Trans Union once the product is under way."
Curiously, Trans Union also continues to distribute CCN models to its customers who used the models before CCN became Experian.
Despite its ventures in the modeling business, Mr. Gambill insists that Trans Union is not a threat to modeling companies.
"I don't know that we are trying to compete with the modeling companies," he said. "We are trying to compete with Experian and Equifax and the 15,000 compilers of direct marketing data."
One top executive with a modeling company said his industry benefits from the bureaus' recognition of their products' value. But if the bureaus "move in the direction of exclusivity with the partners they have, there will be resistance."
The executive, who wanted to remain anonymous because his company works with all three bureaus, said lenders do not want their products bundled.
Fair, Isaac sees its relationships with all three bureaus as "more complicated than ... in the past," said Sheri St. John, the San Rafael, Calif., company's senior vice president of North American credit bureau services.
Ms. St. John also said she views the information companies' partnerships as a reflection of what has been taking place in the financial services industry. "Competitors are looking at strategic alliances" more and more, she said.
Trans Union has also staked a broad but contentious claim in the business of selling information to marketing companies.
The Chicago company has been embroiled in a five-year battle with the Federal Trade Commission over its right to sell lists of consumers to direct marketers. Though Trans Union is still selling the information, its ability to continue doing so seems increasingly tenuous as the legal battle drags on. Equifax and Experian backed down several years ago, when the FTC said the practice violates the Fair Credit Reporting Act.
The FTC maintains that using information from credit files to develop such lists violates consumers' privacy. Trans Union claims it is only providing basic personal information such as names, addresses, and telephone numbers, which could be obtained from a number of sources.
But the FTC argues that Trans Union's credit files should only be used by lenders evaluating credit applications and employers vetting prospective employees.
The case is wending its way through the courts. Trans Union was encouraged last year when the U.S. Court of Appeals for the District of Columbia ruled that the FTC would have to go to trial to prove its contention.
Equifax and Experian have been emboldened by the ruling and are exploring getting back into the business. A trial date of Jan. 26 has been set.
"The current situation limits our ability to grow our business, because people are uncertain whether the data will be available to them if they really like it," Mr. Gambill said.
Trans Union has extended its success across borders. In March 1995 it won a coveted contract to be the official credit bureau of the largest banks in Mexico. Equifax, which has been the most active of the bureaus internationally, fought hard for that designation.
Despite its victory in Mexico, Trans Union has not diversified internationally as much as Equifax. Just over 10% of Trans Union's revenues come from abroad, versus 25% of Equifax's.
"Most of our customers are not putting a lot of pressure on us to go abroad," Mr. Gambill said. "We just see that as the right thing strategically to do." Trans Union has operations in Chile, Peru, South Africa, Kenya, Canada, Puerto Rico, Italy, and Mexico.
As Trans Union asserts itself in other countries, it is also trying to gain stature here. Being more savvy with the media is one of the first steps press-shy Trans Union is taking to improve its image.
Mr. Gambill said the company's attitude toward the media was: "If we couldn't figure out how it would help, then why bother? Now our thinking is, 'If it can't hurt, it might help'-especially as we seek new acquisitions."
Mr. Gambill, who subscribes to the fashionable business adage that "only the paranoid survive," is determined to raise Trans Union's profile. "I don't know how we became the quiet company," he said. "We should be telling our story more."
