[Editor’s note: This is a white paper from Credit Sesame. Credit Sesame is a silver sponsor at LendIt Fintech USA 2019, which will take place on April 8-9 in San Francisco.]
Consumer data and credit scores do more than help people get credit cards, they also provide valuable insight that helps consumers access necessities such as housing, employment, and utility services. The increased demand for credit information has directly affected the growth of many companies, especially the three primary credit bureaus (Equifax, Experian, and TransUnion), each of which now has a market capitalization in excess of $10 billion.
Previously, consumers saw their credit score as a mysterious number only accessible by financial institutions. Even though the credit industry is rapidly changing, and consumers can easily obtain their credit score with only a few clicks, they are left baffled by the lack of information supporting that number—specifically, how it was formed, what it really means, and how to improve it.
Now, robo technology provides opportunities to help both average consumers and credit industry-based businesses. Robo technology is using data and analytics to inform consumers which actions can affect their credit scores while giving financial institutions and others in the credit space opportunities to offer credit lifecycle solutions. After data captures a consumer’s financial goals, analytics is used to suggest actionable items to both improve the consumer’s credit and assist that person in making better financial decisions. This same technology can also be applied to loan underwriting, making it easier for lenders to create customer-specific loans that result in lower default rates.
In this paper, FT Partners used case studies with Credit Sesame, Symantec Lifelock, Upgrade, and MoneyLion to explore what lies ahead in Consumer Credit Management. This paper also explains what a credit score really is, how it has traditionally been used, how that use is expanding, how consumers are becoming increasingly credit-savvy, and how credit data has become big business. Additionally, after diving into the current and future state of credit and exploring consumer credit lifecycle management solutions, key players in the credit management industry discuss how their offerings are shaping the future of lending.