Bloom Credit

Financial institutions face an existential challenge in attracting, retaining, and serving the next generation of customers due to a stark disconnect between perceived and actual service quality. IBM research reveals that while 88% of bank managers believe they understand Gen Z needs, only 34% of those customers agree. The way FIs approach credit data are becoming obsolete, and FIs must swiftly adapt to survive amidst rapid economic and technological shifts. The outdated credit data and scoring models that FIs rely upon are becoming increasingly misaligned with today’s rapidly shifting market demands. Subsequently, they restrict opportunity and inadvertently disadvantage consumers, especially those from emerging generations who often lack extensive (or any) credit histories. Our recent article makes a compelling case for why lenders must urgently revolutionize their approach to data utilization. This new strategy hinges on embracing technological innovations—APIs and alternative credit data sources—which underpin lending innovation. Financial institutions can tap into a richer, more nuanced array of consumer data with this technology, providing a fuller picture of a borrower's financial health and credit potential. It also enables them to furnish that alternative data to bureaus, enriching how credit is scored for consumers. This shift towards a "new data paradigm" is integral to serving future generations. And while financial institutions may feel hindered by compliance mandates and cost, innovative plug-and-play solutions pose a viable solution. These solutions empower their customers to share their data willingly and securely. Such consumer-permissioned data frameworks are compliant and enhance the customer experience by making credit access more personalized and equitable. This is the future of lending and demands that financial institutions adapt swiftly. FIs must leverage these advanced tools to make informed, risk-adjusted decisions that reflect true financial behaviors, fostering a more inclusive financial ecosystem. https://lnkd.in/eZFGfBsW

The average customer age for financial institutions is in the mid-50s, underscoring the need to attract the next generation of customers. Unfortunately, many of those customers fall into historically hard-to-reach segments with limited credit histories or have subprime credit. In late May, we presented a demo of our new Bloom+ solution at Finovate and were awarded Best in Show. We demonstrated how this solution helps financial institutions serve the 100M+ consumers who lack access to mainstream credit products by turning everyday transactions into valuable credit history. For financial institutions, it’s a no-brainer. They access new and growing customer segments, help those customers build their credit, and gain first-in-line access to offer them entry-level credit products – all within the walls of their brand. Here are a few highlights from the demo: 🏦 Seamless integration with mobile banking apps and any other marketing channel 👨💻 No-code, white-label solution  💸 Converts monthly payments into tradelines reported to credit bureaus  📈 Empowers customers to demonstrate creditworthiness in new ways Curious about how Bloom+ is transforming the credit landscape? Watch the full demo and get more information here: 👉 https://lnkd.in/gKYSZzZp Read more on our blog at Bloom's website: 👉 https://lnkd.in/g-kujRgY

Did you know we’re in the midst of a paradigm shift in credit reporting? 📈 A credit score is more than just a number—it's a gateway to financial opportunities. Yet, traditional credit reporting mechanisms fall short, leaving about 100 million Americans marginalized from the financial mainstream due to inaccuracies in credit data and the challenges of building a credit history. 🌐 Consider the young entrepreneur who's ineligible for a loan due to a thin credit file or the immigrant whose foreign credit activities are unrecognized. These are not isolated cases but symptoms of a systemic issue: financial exclusion caused by outdated credit reporting practices. 🔍 According to Experian and Oliver Wyman, 19% of American adults lack conventional credit scores. About 28 million are "credit invisible," and another 21 million are unscorable due to thin files. This issue is compounded by opaque data collection processes from major credit bureaus and reporting errors and inaccuracies. So what’s the solution? 🌟 Leveraging new data sources like utility and rent payments and data from checking and savings accounts. These can shed light on a person’s payment capacity, offering a more accurate picture of creditworthiness. Integrating this data can potentially score nearly all 21 million conventionally unscorable consumers, even touching the 28 million considered credit "invisible." 🚀 At Bloom, we're driving this disruption by enhancing credit data accuracy and embracing consumer-permissioned data. Our furnishment API enables precise, timely reporting across multiple bureaus, reducing errors and better reflecting a consumer's creditworthiness. We also empower consumers (and the financial institutions that serve them) to enrich their credit profiles with real-time financial data, enhancing transparency and access to financial services. 🔧 By enabling more accurate data reporting and allowing consumer-permissioned data, we're not only participating in the evolution of the credit industry but leading it. Imagine a world where credit is a bridge to financial empowerment for everyone, not just a select few. This is our commitment to a more inclusive financial ecosystem, ensuring that every payment counts toward building a fairer credit system for all. Join us in reshaping the future of credit and lending, and check out the full article below: 🔗  https://lnkd.in/ecnvp2yb #FinancialInclusion #CreditScore #BloomCredit #Innovation

The need for consumers to be able to demonstrate creditworthiness in new ways is critical in the effort to expand access to affordable credit. We're thrilled to formally announce our 'Best of Show' win last month at Finovate which helps solve this issue for the 100 million consumers in the US that don't have access to mainstream credit products or rates. https://lnkd.in/enR_zebG

Greg Palmer from Finovate chatted with our CEO, Christian Widhalm, about our win at Finovate Spring and ways Bloom is helping to fix credit data issues impacting the 100 million credit underserved consumers in the US. 👉 https://bit.ly/3x8z9vh #podcast #finovate #fintech #FinovateSpring #credit #lending

Banks and credit unions are facing an existential crisis. The next wave of consumers has no tolerance for the credit and lending status quo. Lack of credit data is a major pain point for consumers. It’s driving up the cost of credit for those who, according to traditional credit scoring models, have poor credit. And it’s excluding consumers from credit who have no or thin credit files. Throw on top aggravating factors like inflation, and consumers have had enough. This should be a blaring warning signal for lenders and the credit industry as a whole. We’ve reached an inflection point. Yet, many FIs are content to stand by the wayside rather than be part of the change. Not only is this inaction contributing to consumers' waning trust in financial institutions, but it’s also adding fuel to the credit and lending fire that is sure to grow into an uncontrollable blaze if nothing is done. We know this story resonates with some financial institutions. We witnessed it firsthand at Finovate Spring, where our Bloom+ product was awarded Best of Show out of 60 participants. FIs that can see the writing on the wall are ready to take action by enabling consumer-permissioned data – data that banks have readily available and that consumers can easily opt into sharing with the bureaus. It’s a critical step in righting the credit ship, especially for consumers with a history of positive financial behaviors, none of which fits into the current credit scoring models. Outdated systems for determining creditworthiness will no longer do – not for the next generation of consumers and borrowers. The actions FIs take now—and the actions they don’t—will determine how the cards fall in the not-so-distant future. #credit #creditdata #furnishment #financialinclusion #accesstofinance #finovate https://lnkd.in/eGd2TzQm

Proud to have been voted Best of Show at Finovate Spring by attendees comprised of banks, credit unions, and investors! So many institutions care about solving the problem facing 100 million consumers in the US that don't have access to mainstream credit products. Bloom is here to help! Chat with us and see how our new product, Bloom+, can help you meet the untapped needs of this incredibly large market opportunity. https://lnkd.in/gwzufH5Q #banks #creditunions #fintech #financialinclusion

How will lenders navigate the next lending boom? First, they need to solve the current credit data problems. There are many. We know this because a growing number of Americans are turning to credit-building solutions to help them improve credit scores and gain access to credit products from which they’re currently excluded. They’re doing this because credit data reporting (aka furnishment) is broken. Fintechs have stepped in to offer solutions in the form of credit-building products, snapping up customers from traditional financial institutions that offer no such products. But there’s a better way. While FIs may feel like they are hamstrung on both compliance and technology fronts, there are ways to even the playing field for consumers while retaining sovereignty over their customers. Learn more about the problem – and how we’re solving it – below: https://lnkd.in/ecGkjpyf #credit #creditdata #furnishment #financialinclusion #accesstofinance

Navigating today’s credit landscape is more than a numbers game. Our credit scores, gateways to economic opportunities, are crafted by models like FICO and VantageScore, which depend heavily on the data they can access. The available data (the operative word being *available*) often omits key financial behaviors like rent and utility payments, as well as obligations and payments made to BNPLs. Without new data types, model evolution stalls, and without model evolution, new data remains on the sidelines. Fragmentation of credit reporting is a major issue, too. Data inconsistencies among credit bureaus can lead to different credit scores for the same consumer. While emerging initiatives might offer baby steps forward, they often don't benefit all bureaus equally, leaving gaps. For consumers, this fragmentation means uneven recognition of financial actions across platforms, affecting credit opportunities and costs. A more standardized approach to data reporting and better integration of alternative data could help. That’s what we’re working toward. Let’s push for a credit system that's more inclusive, accurate, and fair, reflecting true consumer creditworthiness. Dive deeper into these insights and join the conversation on how we can enhance our financial ecosystems. 👉 https://lnkd.in/eVjCvrPq #Finance #CreditScore #FICO #VantageScore #DataPrivacy #ConsumerRights

This recent The New York Times article highlighted how the surging "Buy Now, Pay Later" (BNPL) industry hasn’t traditionally reported loans to credit bureaus. That is, until recently when Apple started reporting its Apple Pay Later loans to Experian, signaling a potential shift towards greater transparency in BNPL financing. This move could be a game-changer, offering users a chance to enhance their credit scores by reliably paying off these loans, enriching their credit profiles in the process. It could also ease growing concerns about "phantom debt" – debt that's invisible to lenders and regulators alike. Despite Apple's initiative, the adaptation among other BNPL providers has been slow. Major players are concerned that current credit models—designed for traditional loans—might unfairly penalize consumers using BNPL services due to their unique payment structures. This has led to discussions about possibly creating an alternative credit bureau specifically for BNPL loans, aiming for a system that better aligns with the fast-paced nature of these transactions. The discussion around BNPL reporting highlights the broader benefits of integrating more data into credit systems. More comprehensive data can lead to more accurate credit evaluations, benefiting not only consumers, who gain from a fuller representation of their financial behaviors, but also lenders, who can make more informed decisions. Industry experts suggest that the evolution towards comprehensive reporting could result either from regulatory mandates or market-driven forces. Either way, one thing is clear: the need for these financial activities – and other alternative financial data – to be reflected in credit reports and/or credit decisions is becoming increasingly crucial. Join the conversation and let's explore how expanding data transparency in credit reporting can create a fairer, more equitable financial system for all. https://lnkd.in/edxbAGF6 #CreditReporting #FinancialInclusion #BNPL #ConsumerFinance #Fintech