Bloom Credit

We're excited to share that Bloom Credit won Tearsheet's 2024 Data Innovation Award! The ability for consumers to demonstrate creditworthiness in new and different ways is more important than ever, and we're proud to have been recognized for our efforts with this award. https://lnkd.in/gwCB_cdA

Credit bureaus and BNPL providers are at an accidental stand-off, and consumers are stuck in the crossfire. Lenders are taking hits, too. The problem is that legacy credit reporting and modeling systems face limitations with new and alternative credit products that inhibit the types of data used to assess creditworthiness. Conventional data pools are not truly accurate (or thorough) assessments of a consumer’s ability to pay. What’s more, furnishment practices aggravate the problem as many furnishers don’t report to all three bureaus, leading to credit data gaps and inconsistencies. BNPL credit data is a major wrench in existing credit data reporting gears – gears that are already a bit rusty. Since BNPL data is nuanced and falls outside of conventional data, the bureaus struggle to integrate it, and current credit models don't necessarily consider it either. Even if those hurdles were surmountable, the furnishment inconsistency issue would still pose a problem. The result? Consumer credit files do not accurately assess or present true creditworthiness. For lenders, this means an absence of information that inhibits their ability to assess risk accurately. For consumers, it means a lack of access to mainstream credit and rates. It’s time for a unified approach that supports comprehensive data integration, robust verification processes, and compliance with consumer privacy laws. Read our latest article for more insights on how to solve the problem: https://lnkd.in/er7zUnuG

Financial fragmentation, where individuals maintain multiple financial accounts across various institutions and fintech platforms, poses significant challenges for traditional banks. Younger generations, in particular, exhibit less loyalty to any single financial institution, making it crucial for banks to find innovative ways to attract and retain these customers. A recent survey highlights that 56% of Americans have accounts across multiple banks, with Millennials and Gen Z being the most likely to switch providers. This behavior results in data silos, where each institution only has a partial view of a customer's financial health, making it difficult to offer personalized services, especially to the credit invisible who lack the traditional credit data it takes to have a sufficient credit profile. Banks now have the opportunity to address both challenges with consumer-permissioned data (CPD). On one hand, API-enabled CPD helps banks empower consumers to share payments data that can boost their credit health. On the other hand, that financial institution is able to retain and grow that relationship, leveraging the more accurate risk assessments alternative data facilitates to offer personalized credit products to consumers they otherwise might not be able to serve. Bloom's consumer-permissioned data solution offers a robust response to the challenges of financial fragmentation. Banks can enable their customers to opt into the service, selecting which monthly payments they’d like to include in what gets furnished to credit reporting agencies. This helps build more accurate credit profiles, allowing banks to offer personalized products based on a holistic view of the customer's financial behavior. By leveraging CPD, banks can retain sovereignty over their customers while helping them build credit, competing more effectively in a crowded landscape. Embracing CPD is not just a tactical move; it's a vital strategy for building stronger, more resilient relationships with the next generation of banking customers. We appreciate the American Banker for letting us share our full thoughts in this article. https://lnkd.in/eDY-2gnB

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