Margins and Paddings Update

In America, 138 million adults are struggling financially.* That’s nearly half the country’s population. Financial health matters. That’s why we’re joining the Center for Financial Services Innovation and the nation’s leading banks, financial services providers and nonprofits in supporting #FinHealthMatters Day on June 27, 2017. We’re at a critical point in our nation’s history. We need to make a stand and address the root causes of financial instability in this country. I believe the lack of financial education and access to cheaper financial products are two of the key contributors impacting people’s financial health today. Financial education drives better financial health Very early in my childhood, I learned the value of a Deutsche mark — or rather a dollar, as we say in the States. I grew up in Germany, where my father was an insurance salesman, a profession where money was sometimes tight. It was my parents’ financial principles that helped them weather the harder days and leverage the better ones. Their golden rule was always to live within their means. To help me grasp this concept, my parents gave me a modest weekly allowance I had to earn by contributing to household chores. Unfortunately, there were no dishwashers when I was growing up so I had the pleasure of hand-washing every dish at the end of each day. What seemed painful in the moment was rewarded with the funds to be able to do what I enjoyed most, like go to the movies or buy tapes to record my favorite tunes on my tape recorder. I had the freedom to spend my money the way I saw fit, but I could only spend what I had earned. It forced me to learn how to manage my money to have enough for the things I wanted or needed. In the United States, 23% of households can’t save because they spend more than their income. -Center for Financial Services Innovation To encourage their savings principle, my parents added an extra incentive to the allowance. If I didn’t spend all my money but rather saved it, I got a pay raise. Depending on the percentage of how much I saved, I saw incremental increases. The more I saved, the more generous the increase. I quickly learned that saving money had a better return than the hour or so spent in a movie theater. 43% of Americans struggle to pay bills and credit obligations. -Center for Financial Services Innovation Thankfully, I was lucky enough to have parents who taught me basic personal finance skills that set me up for success in my adult life. Unfortunately, unless they have parents who are savvy with money, most people will not learn these simple principles because they aren’t taught in most schools. We know education gives people a step up in life. Imagine how financial education would help people increase their financial health by leaps and bounds. This is why we have a dedicated public education team at Experian to provide consumers with proper credit information. This is also why we financially support nonprofits that share our mission of strengthening financial education. Access to credit increases financial health When I moved from Germany to America in 2001, I was part of the underbanked population. I had no credit history. I was invisible to financial institutions. Due to this, I faced many difficulties in accessing mainstream banking services and low-cost loans. 27% of U.S. households are either unbanked or underbanked. -Center for Financial Services Innovation This is a common issue for many people in this country, particularly low-income individuals and immigrants. These consumers are forced to turn to predatory lenders, which means it’s costing them significantly more for basic financial services. In 2015, these consumers spent a combined $141 billion in fees and interest just to manage their day-to-day financial lives.* Fortunately, my bank took into consideration the fact I paid my rent and utilities on time, and that’s how I built my credit. Others aren’t so lucky and will be in the same vicious cycle the rest of their lives, never improving their financial health — unless we do more. At Experian, we want to give the broader population an opportunity to do the same as I did. That’s why we’re working on bridging the gap between underbanked consumers and financial institutions. One way we accomplish this is through alternative data — data that has never been considered in credit decisions by financial institutions. Rental payments weren’t considered until Experian led this industry in incorporating this data into credit files. This data helps the underserved community establish credit histories. The result is greater access to more affordable credit and the overall improvement of their financial health. Our commitment to help improve financial health The struggling majority is the reason I come to work every day. In my role, I have a huge responsibility to consumers. Knowing firsthand that financial education and establishing credit are the pillars of financial stability, it’s my job to make sure we’re finding innovative ways to help people achieve outstanding financial health.   *2016 Financially Underserved Market Size Study published by the Center for Financial Services Innovation http://cfsinnovation.org/research/2016-financially-underserved-market-size-study/

As Serasa Experian’s Corporate Sustainability Manager in Brazil, I’m dedicated to my job promoting diversity and inclusion efforts at work.  But it also happens to be my passion. I believe that companies have a responsibility to reflect the diversity found in society, giving everyone equal opportunity to excel regardless of color, gender or disability. And yet, while a lot of companies over the years have made great strides toward hiring a diverse array of people, sometimes the harder — yet more impactful — work is making sure that diverse group of employees can continue to develop professionally after they’re hired. To this end, Serasa Experian’s Business Network for Social Inclusion (Rede Empresarial de Inclusão Social) launched a program called the Top Talent Project, which encourages and accelerates professional development once someone with physical disabilities is hired. I don’t want to simply hire people with disabilities; I want to ensure they can be productive and grow in their roles. While people with disabilities can bring great experience and skill to their positions, they may need some help integrating into teams. That’s why we work closely with each new hire, their managers and their mentors to guide them on a daily basis. If someone is hearing-impaired, for example, they may know only sign language and not Portuguese, making it difficult for them to communicate with their team. Through the Top Talent Project, we train new hires to communicate at work with their Portuguese-speaking coworkers. And then we give sign language training to their team members! We work hard to create a working environment that ensures success for everyone. In 2016, Serasa Experian received the United Nations Good Practices for Workers with Disabilities Award for our inclusion work in Brazil. That same month, I also was honored to receive the Empregueafro Award from the City Council of São Paulo for promoting ethnic diversity. All these accolades make me so proud because they’re a reflection of the way we at Experian take care of our people. Ten years ago, I changed careers so I could focus more on making the world a better place. Serasa Experian has given me the opportunity to do just that.

In Italy, some people believe that a credit report is just a list of bad people who haven’t paid what they owe. In addition to a poor understanding of how credit works, some Italians also have large amounts of debt, especially among millennials. Young people don’t always think about how their current financial situation can affect their future. Fewer millennials are taking out loans for houses and cars, and more and more take out small loans to pay for their gym memberships or mobile phones. Unemployment rates are high in Italy, and without a job to pay the fees, young families and students’ debt keep piling up. I’ve worked with Experian for 16 years, but my current role as the marketing and communications manager in Italy is the first time I’ve worked directly for consumers, trying to understand their needs and how we can address them. As a Italian, I’ve seen firsthand the lack of good financial education out there – even in the government – and my team and I wanted to find a solution that would help people understand their credit and financial situation to prepare them for the future. My team partnered with Movimento Difesa del Cittadino (MDC) – an organization that promotes the protection of consumers in Italy – to create and launch a new tool in January 2017 called RataTua; or in English, "Your Installment." RataTua is a self-assessment smartphone application that enables consumers to assess their overall finances and their capacity to sustain additional loans. After assessing a consumer’s credit history, the app displays a red, yellow or green indicator of financial risk, and provides helpful tips and financial definitions to help people better understand their financial situation. Our goals with this tool are to educate consumers on how to best prepare themselves for major financial decisions and explain how they can improve their credit scores. At Experian, we have amazing quantities of both positive and negative data, and we’re trying to shift the perspective that credit bureaus are not the equivalent to Santa’s naughty list. In addition to the app, we printed 20 thousand copies of a Consumer Advice Guide that walks consumers through their lending journey – from their decision to apply for a loan to how to avoid falling into too much debt. We’ve distributed these brochures throughout 60 Movimento del Cittadino offices in Italy. In the end, we want to give young Italians more choices and opportunities for their futures, so they can achieve their goals. By helping millennials think through how their financial choices have implications for the future, we can prepare them for unforeseen expenses down the road.