Building a credit history takes time. Establishing a credit history early in life can help ensure you have access to affordable credit when you need it. The problem is that people tend to learn about credit and finances through trial and error. This is unfortunate because recovering from financial mistakes takes time, too. In fact, it could take years to rebound from one financial misstep. This trend is especially common for young adults who are just beginning to get their financial feet wet, and it’s one of the many reasons credit education and improving the financial health of consumers of all ages is core to our mission at Experian. As Director of Consumer Education and Advocacy, I get the opportunity to talk to a variety of students and young adults across the country on a regular basis. Millennials and Gen Z are often labeled slackers, but I don’t believe that for an instant. They experienced the financial crisis firsthand in their early years, and they really don’t want to repeat what their parents went through. Can you blame them, really? One thing we know for certain about young adults is they are very interested in learning as much as they can about money, finance and credit, and it’s our goal to be an educational resource to them. As the saying goes, you don’t know what you don’t know. We have a chance to give younger generations the information and tools to know more than previous generations did at their ages. Here are some of my favorite tried and true tips to help set young adults up for credit success: Start small and grow slowly. A secured account with a small credit limit can establish your credit history and help you start saving at the same time. Good credit and strong savings habits go hand-in-hand. You don\'t need a credit card with a high limit to have good credit. Use the credit you have wisely. Good credit scores are not about having a lot of credit, but rather about how you use the credit you have available. Make a small purchase each month and pay it in full. That will show you can use credit well without taking on debt. Use your cell phone to improve your credit. With Experian Boost, you can add positive telecom and utility payments to your credit history and possibly boost your credit score. In the past, failing to pay your utility or cell phone bills could hurt your credit, but paying on time didn\'t help. With Experian Boost, that\'s changed. Use technology to make managing your credit automatic. Millennials and Gen Zers are the most technologically savvy generations in our history. Use technology, such as online banking apps and credit management tools like the Experian app, to automate savings and payments, to alert you to potential fraud and to track your progress as you build your credit history. We know helping people better understand and access credit is a team effort, and we work closely with our advocacy networks to increase our impact. We recently joined the American Bankers Association to provide young adults with financial education. Leading up to Get Smart About Credit Day, we hosted a Facebook Live with Jeni Pastier, Director of Financial Education Programs for the American Bankers Association to address credit topics young adults typically don’t understand or know about at all. You can watch the full video here and find additional articles to get smarter about credit on the Ask Experian blog.
I recently had the opportunity to discuss the current state of #data collection, analytics, and AI in an interview with @CIODive. As technology advances, businesses can collect and analyse more data than ever before. However, most of that information ends up languishing, seldom being used or even catalogued. Recent research suggests that partly, this happens because businesses are unaware of what data they store or don\'t know how to get actionable insights out of it. This lack of visibility into data stores affects organisations\' readiness to apply artificial intelligence (AI) and machine learning (ML): advanced analytics require data to be properly managed and organised. At Experian, we believe in taking an outcome-focused approach to analytics and AI as we look at activating the power of our data AI outcomes. We work backwards, from high-impact client and consumer outcomes, and bringing to bear the analytics, AI and data to achieve them. This way, we can assess more accurately what effort across data collection and analytics is required to achieve an outcome. Executed effectively this can avoid an enormous amount of investment in people, time, data. If you\'re interested in this topic, I\'d recommend you to read the article in full: http://bit.ly/AImlShri_CIODive
I was born and raised in Germany and had the privilege of moving to the U.S. for my undergraduate degree. When I started school, my parents made a deal with me that they would pay one-third of my tuition. I got a job at the campus library to pay another third but still was short by a third. To cover the gap, I decided to try my luck as an entrepreneur. Specifically, the dollar was very strong due to which it seemed feasible to buy a German luxury car in my native Germany, refurbish it to U.S. specs, drive it for a little while and still turn a healthy profit. In order to purchase my first car, I needed a loan. However, like most new immigrants, I was credit invisible. Meaning, the credit history I had in Germany did not come with me to the U.S. Because of this, I was forced to rely on alternative lending as traditional lenders did not have enough information to assess if I was a good credit risk. With no other options, I turned to an alternative lender and secured a high interest loan. Thankfully, I was able to maintain my payments and paid off the loan in fifteen months, that is, when I sold the car. At this time, obtaining credit from an alternative lender was not factored into a traditional credit history. This meant that even though I repaid the loan responsibly, it did not help build my U.S. credit file or my credit score when I was ready to do it all again. This experience is what fuels my passion to maintain Experian’s position as the leader in alternative credit data and improve consumer financial health. We know that a consumer’s traditional lending history for things like credit cards, personal loans, auto loans, and mortgages are a proven method to assess creditworthiness, but sometimes there isn\'t enough data to score all consumers. Many consumers who are excluded from the traditional credit ecosystem are in fact creditworthy, but due to an international move, divorce or simply a lack of experience with credit, they’re unscorable and or invisible to lenders. Whether you’re new to the country or just getting your financial feet wet, starting to build your credit history can be difficult. If we indeed can play a role in helping consumers live the American dream, I believe it’s our responsibility to do that. The good news is the lending market is in a pivotal state of change and I believe it’s for the better. At Experian, we can now use the responsible payments consumers make to alternative lenders as well as their rental payments, professional licensures, utility and cell phone payments, and, of course, their traditional credit history to help consumers gain access to the financial services they need. We recently announced Experian Lift™ - a new suite of credit score products that combines exclusive traditional credit, alternative credit and trended data assets to create a more holistic picture of consumer creditworthiness. We believe Experian Lift may improve access to credit for more than 40 million credit invisibles. It’s another step in our commitment to helping improve the financial health of consumers everywhere. As you may know, earlier this year, Experian launched Experian Boost – a free and first-of-its-kind financial tool that empowers consumers to add positive telecom and utility payment history directly into their Experian credit file for an opportunity to instantly increase their FICO Score. Through Experian Boost, we’re empowering consumers to play an active role in building their credit histories. And, with Experian Lift, we’re empowering lenders to identify consumers who may otherwise be excluded from the traditional credit ecosystem. Thin file or subprime consumers have typically been viewed as a fringe and stigmatized segment of society. I can speak from personal experience and say this is not the case. With more than 100 million consumers lacking access to fair and affordable credit, we know this is mainstream America and we need to continue to provide solutions. As the consumer’s bureau, our goal is to help consumers and maintain access to credit. We’re proud of our latest innovations and will continue to identify new means to help consumers gain access to the financial services they need.
We are delighted to have been placed on the inaugural Financial Times’ 2020 Diversity Leaders list, released today and accessible here. The organisers spoke to more than 80,000 employees across Europe to build the list, asking employees to rate their own employers as well as other firms around multiple categorise, taking into consideration areas including age, gender, ethnicity, disability, LGBTQ+ and overall diversity of ideas and backgrounds across the company. Over the last few years we’ve worked hard to focus on inclusion and diversity across our global business. We believe that embracing a truly inclusive culture, one where everyone has a real sense of belonging, is critical to building a diverse workforce and fostering innovation. Ultimately, it’s our ambition for our business to become as diverse as the people we serve around the world. We’re dedicated to encouraging diversity at every level within Experian. That means building our culture, our ways of working and our approach in a way that offers equality of opportunity. Supporting our employees from the moment they join our organisation, at every level. Letting people work flexibly, in the way that suits them and opens the door to new opportunities. One of the five key tenets of The Experian Way is “Value Each Other”. That means that each one of us is responsible for making this a great place to work. We treat each other with respect, trust and integrity. We support and invest in each other to help everyone achieve their potential and aspirations. We promote a culture of inclusivity and value diversity of all kinds, including thinking, knowledge and experience. Our goal is to embrace and celebrate the diversity of ideas and backgrounds across the company. This diversity of thinking, and the way we harness it at Experian, helps to fuel our innovation and ultimately our ongoing success as a business. Like many companies, we have more to do to be as inclusive as we would like to be. But we are proud of the work we’ve done to date, and we are delighted by the recognition given to us today.
Today, I’m pleased to share another strong set of Half Year results for our FY20 fiscal year. We have achieved 7% organic revenue growth, with total H1 growth of 8% when you include acquisitions. The performance reflects the continued success of our core business new product introductions, as well as rollout of our innovation agenda and the investments we have made in globally scalable products. At Experian we are helping our clients get better at acquiring, onboarding and managing their customers’ needs in the digital world. To do this, they are increasingly relying on data, combined with sophisticated analytics and decisioning capabilities, areas in which we excel. In addition, to helping businesses, we are continuing to expand our direct relationships with consumers. Over 70 million people across our three major markets now benefit from free Experian memberships, accessing information and tools to enable them to take control of their finances. A great example of this is Experian Boost in North America, where we enable consumers to voluntarily add payment histories for things like their mobile phone and utility bills to their credit profile. It’s been a successful year to date, but there is plenty more to come. With a continued focus on people, technology and innovation, we are revolutionising the way our industry operates - using the power of data, software and analytics to improve outcomes for everyone. To find out more, click here.
Veterans are an integral part of our freedom but did you also know that veterans are very successful small business owners? Veteran businesses can have a material economic impact in the regions where they are located. According to our Experian Veterans Study released this week, veterans are running strong businesses and veteran owned businesses have been consistently less risky overall when compared to non-veteran owned businesses for the past five years. The report also found that veterans have better consumer and commercial credit scores than non-veteran businesses. Veterans tend to own and operate businesses in more labor-intensive industries such as construction, manufacturing, wholesale trade and transportation. This may indicate that veteran business owners take the discipline and skills learned during their service and apply them in business as they create successful companies and drive significant economic impact. They also employ more individuals, which may be a result of the industry types of businesses they own such as construction and manufacturing. Our study showed that veterans across the country, are mostly well educated on credit and how to use it to grow their business. That engagement is important as it can have a positive impact on the economy through the creation of jobs. Veteran businesses also tend to have a lower probability of failure, a lower risk of serious delinquency within the next year and produce higher annual sales. Another interesting finding was that veteran businesses have better longevity and sustainability as inferred from their commercial credit when compared to non-veteran owned businesses. Overall across industries, veterans have a 67% longer credit history. Veteran business owners also have deep credit files with approximately 77% more tradelines overall. From a capital standpoint, veterans on average have approximately 192% more capital funding than non-veteran business owners. Veteran owned businesses touch a large network of business relationships as they tend to hire more employees, have more business to business relationships and utilize more commercial credit. This network drives positive economic impact through things like payroll, taxes, and vendor and supplier engagement. Entrepreneurship among U.S. veterans has been in decline since the late 70’s, but veteran business owners remain an important credit-successful source of job creation for our economy. There are countless ways we can thank our veterans for their service, another way to thank them is by supporting their businesses in our communities. Credit suppliers should continue to promote and bolster veteran business owners as a means of putting money to work in low risk economically influential businesses. To learn more about the Experian Veterans Study, or to watch the webinar, click here.
Today (Nov. 11) Americans celebrate Veterans Day to honor all of the men and women who have served our country in uniform and to thank those who are currently serving around the world. We also take time to welcome a new generation of veterans home from war. We remember our Gold Star families who have endured the loss of a family member making the ultimate sacrifice in service to their country. More than 25 million veterans are now home in America. They are our friends, our families, and our loved ones. Far too many have endured the shock and pain of a combat deployment, some have become disabled, and many have made the ultimate sacrifice. All who have served have given up some of themselves as well as some of the best years of their lives. Experian is proud to embrace our veteran community and allow the flexibility for our coworkers who continue to serve. Our Military, Veterans And Patriots Employee Resource Group continues to be involved in many opportunities across our local communities from building wheelchair ramps for disabled veterans to participating in endurance challenges such as Carry the Load National Relay road march and the Murph Challenge. We recently launched Experian IDnotify, a credit and identity protection service, at no cost for those who are on active duty. We are committed to serving those who are serving us. If you have a family member or friend serving on active duty, please share the link. This Veterans Day let us take a moment to remember the sacrifices of the courageous men and women who heroically fought for the freedom and honor of America to make it the greatest nation on earth!
Retailers are already starting to display their Christmas decorations in stores and it’s only early November. Some might think they are putting the cart ahead of the horse, but as I see this happening, I’m reminded of the quote by the New York Yankee’s Yogi Berra who famously said, “It gets late early out there.” It may never be too early to get ready for the next big thing, especially when what’s coming might set the course for years to come. As 2019 comes to an end and we prepare for the excitement and challenges of a new decade, the same can be true for all of us working in the lending and credit space, especially when it comes to how we will approach the use of alternative data in the next decade. Over the last year, alternative data has been a hot topic of discussion. In fact if you typed “alternative data and credit” into a Google search today you would get more than 200 million results. That’s a lot of conversations, but while nearly everyone seems to be talking about alternative data, we may not have a clear view of how alternative data will be used in the credit economy. How we approach the use of alternative data in the coming decade is going to be one of the most important decisions the lending industry makes. Inaction is not an option, and the time for testing new approaches is starting to run out – like Yogi said, it’s getting late early. And here’s why: millennials. We already know that millennials tend to make up a significant percentage of consumers with so-called “thin-file” credit reports. They “grew up” during the Great Recession and that has had a profound impact on their financial behavior. Unlike their parents, they tend to have only one or two credit cards, they keep a majority of their savings in cash and, in general, they distrust financial institutions. However, they currently account for more than 21 percent of discretionary spend in the U.S. economy, and that percentage is going to expand exponentially in the coming decade. The recession fundamentally changed how lending happens, resulting in more regulation and a snowball effect of other economic challenges. As a result, millennials must work harder to catch up financially and are putting off major life milestones that past generations have historically done earlier in life, such as home ownership. They more often choose to rent and, while they pay their bills, rent and other factors such as utility and phone bill payments are traditionally not calculated in credit scores, ultimately leaving this generation thin-filed or worse, credit invisible. This is not a sustainable scenario as we enter the next decade. One of the biggest market dynamics we can expect to see over the next decade is consumer control. Consumers, especially millennials, want to be in the driver’s seat of their “credit journey” and play an active role in improving their financial situations. We are seeing a greater openness to providing data, which in turn enables lenders to make more informed decisions. This change is disrupting the status quo and bringing new, innovative solutions to the table. At Experian we have been testing how advanced analytics and machine learning can help accelerate the use of alternative data in credit and lending decisions. And we continue to work to make the process of analyzing this data as simple as possible, making it available to all lenders in all verticals. To help credit invisible and thin-file consumers gain access to fair and affordable credit, we’ve also recently announced Experian Lift, a new suite of credit score products that combines exclusive traditional credit, alternative credit and trended data assets to create a more holistic picture of consumer creditworthiness that will be available to lenders in early 2020. This new Experian credit score may improve access to credit for more than 40 million credit invisibles. There are more than 100 million consumers who are restricted by the traditional scoring methods used today. Experian Lift is another step in our commitment to helping improve financial health of consumers everywhere and empowers lenders to identify consumers who may otherwise be excluded from the traditional credit ecosystem. This isn’t just a trend in the United States. Brazil is using positive data to help drive financial inclusion, as are other around the world. Like I said, it’s getting late early. Things are moving fast. Already we are seeing technology companies playing a bigger role in the push for alternative data – often powered by fintech startups. At the same time there also has been a strong uptick in tech companies entering the banking space. Have you signed up for your Apple credit card yet? It will take all of 15 seconds to apply, and that’s expected to continue over the next decade. All of this is changing how the lending and credit industry must approach decision making, while also creating real-time frictionless experiences that empower the consumer. We saw this with the launch of Experian Boost earlier this year. The results speak for themselves: hundreds of thousands of previously thin-filed consumers have seen their credit scores instantly increase. We have also empowered millions of consumers to get more control of their credit by using Experian Boost to contribute new, positive phone, cable and utility payment histories. Through Experian Boost, we’re empowering consumers to play an active role in building their credit histories. And, with Experian Lift, we’re empowering lenders to identify consumers who may otherwise be excluded from the traditional credit ecosystem. That’s game changing. Disruptions like Experian Boost and newly announced Experian Lift are going to define the coming decade in credit and lending. Our industry needs to be ready because while it may seem early, it’s actually getting late.
At Experian we’re committed to creating a culture of continuous innovation, from the way we work to the solutions we create. This commitment has helped us create a workplace where our teams across the world have a desire to help change the lives of millions for the better. Justin Hastings, Chief Human Resources Officer for Experian North America, recently wrote an article for the Forbes Human Resources Council which highlights the importance of creating an inclusive environment in the workplace -- and demonstrates how innovation, developing new products and services, and providing value are all crucial to a companies’ success. The article, “Deliver Innovation By Embracing Inclusion,” explores what it means to build a culture of innovation, and how to ensure employees feel comfortable bringing their different backgrounds and ideas to their role every day. This is the type of innovative culture we’re building at Experian, which celebrates these differences and works to make employees feel valued and empowered to be innovative and productive. Another concept Justin discusses in this article is “innovating to grow.” It’s important to make employees feel connected to their organization and involved in the creation of new products and services. This has a tremendous positive impact with employees providing valuable feedback, and also creating advocacy among team members. For example when developing Experian Boost, which has helped millions of people raise their credit scores, we first beta-tested and shared the innovation internally and were able to garner valuable feedback and support from employees. As a result, we’ve seen tremendous success since the launch of Experian Boost earlier this year. At Experian we truly believe that inclusion is the key to creating a culture of innovation. You can read the full article here.
