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THE FinTech industry is helping to solve a credit crisis by enabling financial institutions to nurture relationships with consumers who applied for their loans but were denied due to the lender’s origination standards.
Bloom Credit works with the declined applicant and provides actionable credit-building insights to strengthen their credit health and financial readiness for the loan they originally requested – the applicant may also receive new loan offers and product recommendations.
Applicants on the platform typically become serviceable in one to six months and grow their credit scores. “We believe all consumers are inherently creditworthy but may simply need help to earn the credit they need and deserve. And, while lenders have the capacity to lend, we also recognise they receive too many non-qualified applicants and simply must say ‘no’ or price at rates that don’t make sense for the customer,” said Matt Harris, its co-founder and CEO.
“We see the opportunity for a new beginning. We’re working to change what can be a very negative borrower-lender experience and seed a healthy relationship dynamic from the start.”
The financial sector has become excited by the prospect and already the FinTech start-up has raised a total of $3.87 million in seed investment. Special advisors to the ‘financial wellness’ platform include FinTech luminaries such as Mark Goines, vice chairman of Personal Capital, Matt Burton, founder of Orchard, Eli Broverman, founder of Betterment and Shivani Siroya, founder of Tala.
Founded last year, Bloom Credit graduated from the US 500 Start-ups Batch 20 acceleration programme which also invested in the company through its FinTech Fund. Similar programmes have been put in place in Bahrain, as highlighted in FinTech Focus.
“Bloom Credit’s application of deep data science to the credit rating process is unlocking a massive but neglected market for lenders while helping consumers obtain credit they actually merit,” said Mike Hirshland, co-founder of Resolute Ventures who led the investment.
“The combination of team, technology and a demonstrated market opportunity has us thrilled about the opportunity ahead.”
Bloom Credit’s platform integrates traditional credit bureau data and alternative data sets to evaluate a consumer’s credit history and forward-looking financial goals. Through AI, machine-learning algorithms, human interventions and a digital user experience, Bloom Credit provides a turn-by-turn of prospective actions for consumers to take to improve their credit health before seeking new loan eligibility.
“Having access to good credit is key to so much in our world, from basic transportation to secure housing and more. Many of us take this for granted, while others are wrongly locked out. Inclusion will be the essential component of next-generation financial services,” said Sheel Mohnot, partner, 500 Startups, Fintech Fund.
“Through data science and analytics, they will help more consumers fully participate in the best of the credit market, and also help financial providers to make this goal attainable.”
Bloom Credit licences its software-as-a-service via API to financial institutions and their partners to enable them to nurture customer relationships directly. The company receives fees from lenders for successful graduations and product recommendations that create new loan relationships. It is currently working with both loan originators and their partners and directly with consumers.
“We’re honoured to be partnering with some of the best investors and financial and FinTech luminaries to help consumers and lenders build healthier credit relationships than the status quo. With this financing round, we’ll strengthen our products, reach and help more consumers, and advance our programmatic customer-nurturing engine for lenders,” added Matt.