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With Small Business Saturday quickly approaching, Experian wants to remind small business owners why it is important to have good business credit. Good credit scores – they’re not just for consumers. Businesses need them, too. According to a recent Experian survey, only 33 percent of small business owners said they were able to get the capital they need to maintain satisfactory cash flow. Good business credit can help business owners receive the funding they need, as well as help them earn more favorable terms and lower interest rates. “A business credit score is one of the first things lenders, suppliers and some customers look at before deciding to do business with a company,” said Laura DeSoto, senior vice president for Experian’s Business Information Services. “The insight that a business credit report provides, enables small business owners to take any necessary actions that will affect future growth. By spending dedicated time and resources building business credit, a company is establishing good management habits, which can help them obtain the resources they will need.” To help educate small business owners on the basics of building business credit, Experian is hosting a tweet chat on Wednesday, Nov. 19, at 12:00pm Pacific time. You can follow the conversation using #CreditChat. Small business owners can also get started monitoring the health of their business credit report at SmartBusinessReports.com, which is now mobile-friendly. Consumers are now able to order and review business credit reports from their smart phone or while at their desk. Business credit reports include pertinent data elements such as a commercial risk score, payment trends, public record information and key business facts. Other business credit management resources include: • BusinessCreditFacts.com – A source for understanding and learning about the benefits of managing business credit. Additionally, the site enables small business owners to check their business credit listing on Experian’s business credit database. • Experian.com/small-business – A Website that provides the tools and services for small business owners to monitor business credit, mitigate credit risk and manage cash flow.
Experian has been named to Forbes' list of the top 100 most innovative companies in the world. The world’s most innovative companies were united by one factor at the heart of Forbes’ methodology: ‘investors’ ability to identify firms they expect to be innovative now and in the future. This ‘Innovation Premium’, alongside other factors, determined whether a company is included in Forbes’ exclusive list. For Experian, innovation is part of our DNA, from the 1950s when a punch card system was introduced to process credit information, to the present day, where our data labs are at the forefront of data science. Experian DataLabs are staffed by teams of scientists with Ph.Ds. and applied research practitioners with expertise in advanced analytics and machine learning, as well as other advanced statistical methods. The lab in North America has had some remarkable success with Fortune 500 clients where they been able to identify previously undetected risks and signals from data sets comprising billions of transactions. By analyzing many multiple variables in new ways—natural language processing against payment card accounts for example, they gain insights that are incredibly useful for our clients. For example, one of the largest banks in American asked the DataLab to find more effective ways of convincing their debit card users to use their credit cards. To develop the solutions the lab analyzed about 7 billion customer transactions over a three-year period from the bank, and incorporated Experian’s data. The lab’s solution entailed finding 550 unique segments of users that the bank could target. That was far too many so the lab culled the segments down to 20. The bank was so pleased with the outcome it has engaged the lab in an ongoing contract. The developed solution is also being used by five other major banks. Our culture of innovation is thriving as Experian continues to grow and lead the way in developing solutions and harnessing the power of data to turn insights into actions. That value added insight can help a consumer secure an affordable loan, improve their credit score, or protect their identity; or for a business to mitigate risk, help prevent fraudulent transactions, or even to ensure they are marketing their products and services to the right consumers at the right time and across the right channels.
One of my favorite sayings growing up as a kid was, “One man’s trash is another man’s treasure.” While these words can have a very literal meaning, at its essence, it means that everything has a value to someone. There couldn’t be a more fitting circumstance to apply this saying than when you look at the automotive industry, especially in relation to leased and certified used vehicles. After all, most certified used vehicles were once leases. According to a recent analysis, Experian Automotive found that consumers in larger metropolitan areas leased more vehicles than were purchased new, and those in smaller areas tended to buy more certified used* vehicles than new. Cities such as Detroit and New York saw extraordinarily high volumes of leases. During the analysis period**, leases accounted for 67.9 percent of all new vehicle registrations*** in Detroit, while they accounted for 49.8 percent of new vehicle sales in New York. Top 5 metropolitan areas new vehicle lease penetration Detroit 67.9 percent New York 49.8 percent Flint, Mich. 49.1 percent Youngstown, NY 46.5 percent Cleveland 43.6 percent By comparison, cities such as San Angelo and Victoria, Texas had the two highest percentages of certified used registrations compared to overall vehicle sales. San Angelo had 26.7 percent of its total vehicle sales fall under the certified used category, while Victoria had 25.1 percent. Top 5 metropolitan areas for highest percentage of certified used vehicle sales San Angelo, Texas 26.7 percent Victoria, Texas 25.1 percent Corpus Christi, Texas 24.4 percent Odessa, Texas 24.3 percent Lubbock, Texas 24.2 percent “Not every market is the same. Economic and social issues often drive sales,” said Brad Smith, director of automotive market statistics for Experian. “Detroit for example, benefits from the presence of Chrysler, Ford and General Motors, as well as numerous suppliers and many friends and family programs. By gaining insight into consumer purchasing behavior in their market area, dealers and manufacturers can take more targeted actions with regard to managing their inventory, capitalizing on growth opportunities, gaining new customers and improving profitability.” Further analysis found that from a brand perspective, MINI had the highest percentage of certified used vehicles compared to total vehicle registrations**** at 32.7 percent, followed by Ram (28.9 percent), Hyundai (28.3 percent), Mercedes-Benz (28.3 percent) and Kia (27.7percent). So, which certified vehicles are consumers purchasing the most? The analysis showed that the Toyota Camry had the highest volume of certified used registrations, followed by Nissan Altima, Ford F-150, Ford Fusion and Chevrolet Silverado. The next time you are in the market to buy, which will you get … new or certified used? While not every vehicle type is going to meet every person’s preference or specific situation, by understanding what metal is moving in the market, dealers, manufactures and consumers can find the “treasures” that best fit their needs. *For the purposes of this analysis, certified used vehicles are an approximation based on model year parameters (0-5 years old) **Analysis was based on January-September 2014 data ***Minimum 10,000 new vehicle registrations ****Minimum 100,000 vehicle registrations
Today, we stand at the forefront of a digital revolution that is reshaping the financial services industry. And, against this backdrop, financial institutions are at vastly different levels of maturity; the world’s biggest banks are managing large-scale infrastructure migrations and making significant investments in AI while regional banks and credit unions are putting plans in place for modernization strategies, and fintechs are purpose-built and cloud native. To explore this more, I recently had the privilege of attending the annual Reuters NEXT live event in New York City. The event gathers globally recognized leaders across business, finance, technology, and government to tackle some of today’s most pressing issues. On the World Stage, I joined Del Irani, a talented anchor and broadcast journalist, to discuss the future of lending and the pivotal role of data and AI in building a more inclusive financial system. Improving financial access Our discussion highlighted the lack of access to traditional financial systems, and the impact it has on nearly 100 million people in North America alone. Globally, the problem affects over one billion people. These people, who are credit invisible, unscoreable, or have subprime credit scores, are unable to secure everyday financial products that many of us take for granted. What many don’t realize is, this is not a fringe subset of the population. Most of us, myself included, know someone who has faced the challenges of financial exclusion. Everyday Americans, including young people who are just starting out, new immigrants and people from diverse communities, often lack access to mainstream financial products. We discussed how traditional lending has a limited view of a consumer. Like looking through a keyhole, the lender’s understanding of the person in view is often incomplete and obstructed. However, with expanded data, technology, and advanced analytics, there is an opportunity to better understand the whole person, and as a result have a more inclusive financial system. At Experian, we have a unique ability to connect the power of traditional credit with alternative data, bringing a more holistic understanding of consumers and their behaviors. We are dedicated to leveraging our rich history in data and our expertise in technology to create the future of credit and ultimately bring financial power to everyone. The future of lending After spending two days with over 700 industry leaders from around the world, one thing is abundantly clear: much like the early days of the internet, today, we are at the cutting-edge of a technical revolution. Reflecting on my time at Reuters NEXT, I am particularly excited by the collective commitment to drive innovative, and smarter ways of working. We are only beginning to scratch the surface of how data and technology can transform financial services, and Experian is positioned to play a significant role. As we look to the future, I am excited about the ways we will create new opportunities for businesses and consumers alike.
We believe that financial literacy leads to empowerment. That is why Experian supports initiatives and partners with community organizations to deliver financial education. We also develop products and services that give more control to consumers over their credit profile and financial health. As part of advancing our mission of Financial Power to All®, we are proud to announce we are helping more than 5,000 Hispanic individuals nationwide by relieving $10 million dollars of consumer debt. To provide families with this boost, we joined forces with ForgiveCo, a Public Benefit Corporation (PBC), to administer the acquisition and cancellation of qualifying consumer debt for the selected recipients. Beneficiaries will also receive a one-year premium Experian membership for free that offers access to their Experian credit report in English and Spanish[i], FICO® Score[ii], bilingual educational content, and other financial resources. We hope this effort helps raise awareness of the importance of financial literacy for everyone, and that Experian has resources to help individuals reach their financial dreams. To amplify the message, we collaborated with multi-platinum, award-winning singer and songwriter Prince Royce and you can see his video here. In fact, we have been making a concerted effort the last several years to evolve our educational resources and products to better support all underserved communities. Some of our other activities include the creation of the B.A.L.L. for Life initiative that connects African American and Hispanic youth with financial education, supporting scholarships for Asian Americans through the Ascend organization, providing custom resources for Out & Equal and Born This Way Foundation for the LGBTQ+ community, supporting the NextGen Innovation Lab for Disability:IN, and sponsoring credit counseling for the military community with Operation HOPE. For resources in Spanish, Experian offers a credit e-book and consumers can access a full suite of articles at the Ask Experian blog here. [i] Only Experian credit reports are available in Spanish. All other services associated with an Experian membership are available in English only. English fluency is required for full access to Experian’s products. [ii] Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether. Learn more.
Amid some of the financial challenges that underserved communities experience, members across the financial services community remain committed to championing initiatives and programs that drive greater financial inclusion. In fact, collaboration has led to the inclusion of non-debt related payment information on consumers’ credit profiles, as well as digital services that make it easier to manage money. These efforts have helped to broaden access to fair and affordable financial resources for more individuals. While significant progress has been made, there is still more work to do. However, some of the misconceptions and myths about the financial services community are hindering further advancement. Debunking these myths will accelerate progress by building trust between the financial services community and consumers. Person withdrawing money from ATM contactless Myth #1: “Financial institutions have no interest in underserved consumers or credit invisibles.” The truth is, banks and credit unions want to say “yes” to more prospective borrowers, including individuals and families from underserved communities. Beyond being the right thing to do, it’s an opportunity to potentially build lifelong relationships with a relatively untapped market. A show of good faith to communities who have largely been ignored by the financial system could lead to customer loyalty that may extend to their family and friends. That’s why participants across the financial ecosystem have been proponents of including expanded data sources—such as on-time telecom, utility and video streaming service payments—on to consumer credit reports, as well as exploring other Fair Credit Reporting Act (FCRA)-regulated data sources, including payment data on short-term small dollar loans and expanded public records data. Making this data more accessible to lenders provides a more comprehensive view of a consumer’s ability and willingness to repay outstanding debt—an actionable solution to extending credit to consumers without lenders taking on additional risk. Myth #2: “There is a lack of trustworthy financial education resources.” The financial services community and affiliated organizations recognize that empowering people with financial knowledge and skillset are critical to consumers’ financial success. In fact, banks and credit unions are partnering with nonprofits and non-governmental organizations to better understand the unique challenges and opportunities within specific communities and provide relevant tools and resources. For example, Experian’s B.A.L.L. for Life (Be A Legacy Leader) program, launched in partnership with the National Urban League, serves as a catalyst for engaging with Black communities and low-income youth through live events and digital financial education. Subject matter experts, professional athletes, celebrities, and other influencers share their experiences and expertise, covering topics such as banking, credit, financial management and investing. In addition, to help people improve their financial management, Experian partners with the National Foundation for Credit Counseling (NFCC). The NFCC connects consumers with certified financial counselors to help them address various pain points, including debt management, homeownership, student loans or small business cash flow issues. Myth #3: “Underserved communities have few opportunities to build credit and enter the mainstream financial system.” People from underserved communities, as well as younger consumers and recent immigrants are often excluded from the mainstream financial system because they lack an extensive credit history. Historically, it’s created a vicious cycle; in order to get credit, you have to have credit. Fortunately, there has been a sea change in innovative solutions to address the specific needs of these populations. These include new credit scoring models and microfinancing which provide financial services to individuals who may have been excluded from traditional banking systems. In addition, by incorporating expanded data sources, such as telecom, utility and residential rental payments onto credit reports, lenders have more visibility into consumers who may have been excluded by traditional credit scoring methods.These programs help individuals and families from underserved communities establish and build a credit history that could enable loans, or the ability to rent an apartment or open their dream business. An example is Experian Boost®, a free feature that allows Experian members to contribute their history of making utility, cellphone, insurance, residential rent and video streaming service payments directly into their Experian credit profile. By incorporating nontraditional credit data like paying utility bills on time, online banking transactions, rental payments and verified income data, more people can establish a credit profile that can potentially qualify them for a loan. More Inclusion, Fewer Myths It’s encouraging that community organizations and banks are beginning to see the economic and social benefits of aligning on financial literacy and inclusion. As more initiatives come online, underserved populations will be able to establish a better financial foundation. Then, we can declare the myths to be history.