Want to Improve Consumer Credit? Keep the Focus on FICO, Elevate Says

EXCLUSIVE— Alternatives to the traditional FICO credit score have become a popular theme for emerging fintechs, but will it actually help consumers improve their credit?

Credit solutions provider Elevate, however, will focus on improving its customer’s relationship with their FICO score in 2018 as well as on alternative methods of scoring.

“Consumers are more focused on their FICO score than on learning to save or on budgeting,” Jason Harvison, COO for Elevate, told Bank Innovation, according to research the company has conducted. “One of the drives is, you just see FICO as more prominent: customers feel the impact when they’re applying for a job, a loan. It’s more trackable.”

While this might run counter to the way some fintech startups are treating credit, Elevate’s connection to the traditional scoring model has had a measured impact on its customers’ financial health: 140,000 users of the company’s RISE credit product have seen an improvement in their credit scores since the product first launched in 2013 (out of the approximate 500,000 customers the product has had since that time, Harvison said).

The average jump in credit score for these 140,000 customers was about 48 points, Harvison said—the average credit score of a RISE customer ranging from about 580 to 600, he said.

RISE, which first appeared in 2013, is an unsecured loan product that caters to non-prime consumers, or those with scores below 700. The product also offers lines of credit to users alongside loans, and customers can receive a reduction in rates after several months of successful payments to grow that user’s financial health.

Alongside the financial literacy tools and free credit monitoring the RISE product already offers, Elevate will be focused on further improving the customer’s relationship to their FICO score and financial  health, Harvison said.

The company is focused on “how we can enhance some of the features we have” for 2018, Harvison said, adding the company was “doing the research” on what those improvements would be.

However, one of those improvements will be a mobile app, which will augment the fully-online RISE experience, Harvison said.

“We think that [the mobile app] will really help improve customer interaction once they’ve onboarded; that’s something that’s on the roadmap for 2018,” Harvison said.

No date has been released for the app’s arrival as yet.

Learn more about credit and online lending at Bank Innovation 2018 in San Francisco on March 5-6. Request your invitation here.

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