Credit Karma Archives - Page 13 of 13

Lending Club Launches UNCRUNCH AMERICA, a Microsite Advocating Social Lending

By Jim Bruene Posted on January 19, 2009
Categories: Credit Karma, Geezeo, Lending Club, P2P Lending

During the Christmas holidays, Lending Club and its partners launched a clever new microsite, UNCRUNCH AMERICA at <uncrunch.org>. The site promotes peer-to-peer lending as a way to help increase the availability of credit in the United States (see screenshots below).

Joining the effort are four others:

Credit Karma, a provider of free credit scores (coverage here)
Geezeo, an online PFM (coverage here)
On Deck Capital, a small business finance specialist
ChangeWave, an investment research and publishing company owned by InvestorPlace Media

The site explains the concept behind peer-to-peer lending and funnels visitors to Lending Club or On Deck Capital to borrow. Lending Club was promoting the site on its homepage (see third screenshot), but it’s no longer mentioned. And none of the other partners mentions it on their sites.

The site consists of just two pages, the homepage and a Learn More page listing the partners. The homepage uses Flash to deliver five different messages. The red action buttons lead to a special landing page to Lending Club (see third screenshot).

According to American Banker, Lending Club hired Tobin Smith, the chairman of ChangeWave Research, to create the campaign.

Analysis
Overall, I like the UNCRUNCH idea. It’s timely. It has a catchy name. And it resonates with consumers. But companies must be very careful using consumer advocacy as a marketing strategy. While most consumers understand the need for the sponsor to make a buck, they can see right through anything that appears overly self-serving.

In financial services, credit unions have a distinct advantage here. As member-owned cooperatives, their consumer advocacy messages are believable. Shareholder-owned banks have less credibility, but can still pull it off if they back up their words with a record of action.

I think that’s why ING Direct’s We the Savers campaign works (see previous post here). For its entire eight years in the United States, the bank has consistently promoted savings and thrift. So few question its motivations behind the We the Savers petition drive, though clearly it supports the bank’s for-profit savings program.

On the other hand, UNCRUNCH AMERICA was a bit misleading when it first launched (see first screenshot below from Jan 7). But with the recent improvement in disclosing the site’s purpose and primary sponsors, I think it’s acceptable now (see second screenshot below from Jan. 19).

Here are the main improvements:

It wasn’t clear that the primary sponsors were lenders. But the new site includes Personal Loans and Small Business Loans sections that clearly disclose the Lending Club and On Deck Capital involvement. There is also new fine print at the bottom of the page that further identifies the sponsors.
The original copy made it sound like a completely altruistic effort with its main pitch, Invest in America. That section has been completely removed and the site no longer solicits investors/lenders. It’s clear now that the site is designed to generate loan leads. The main button on the homepage was changed from Invest in America to I Need a Loan.

I’m relieved that UNCRUNCH.org has stepped up its transparency. At this point in the financial mess, we need lenders and other financial entities to be totally upfront with the public so as not to invite even more regulation than what is already coming. Given its six-month hiatus in 2008 while it revamped to comply with new SEC requirements, Lending Club should understand that better than most.

Other financial institutions should consider similar cooperative efforts in their local areas. The public could use some positive messages from the banking sector.

1. UNCRUNCH AMERICA homepage before improvements (7 Jan. 2009)

2. Homepage after transparency improvements (19 Jan. 2009)

3. Lending Club homepage featured UNCRUNCH button (7 Jan. 2009)
but it has since been removed

Note:

1. For more info, see our Online Banking Report on Peer-to-Peer Lending.

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CheckFree, Credit Karma, Mint and MoneyAisle Win Finovate Best of Show Awards

By Jim Bruene Posted on October 15, 2008
Categories: CheckFree, Credit Karma, Finovate, Mint, MoneyAisle

As conference host, I haven’t quite recovered from the whirlwind of activity yesterday. I’ll post a final conference wrapup tomorrow, but I wanted to get in a quick update with the Finovate 2008 Best of Show winners.

We had planned to award it to the top three, but there were four companies in a virtual tie at the top (note 1), so we named four winners this year.

In alphabetic order, the winners:

CheckFree which demonstrated its new online banking platform packed with new features
Credit Karma which showed several new features including a tool allowing “what-if” calculations with your credit file
Mint which announced its move out of beta and demo’d several new investment management functions
Neosaej which showed its unique MoneyAisle real-time, reverse-deposit auction service

Congratulations to these four companies and to everyone else who made the day so interesting.

About the voting
All attendees not affiliated with the presenters rated each demo on a scale of one to six. The ballots were turned in at the end of the final demo session. Approximately 70% of eligible voters turned in complete ballots.

Note:
The companies didn’t finish with the same average scores, but rounding to the nearest tenth created a four-way tie.

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Finovate 2008 Credit Karma

By Jim Bruene Posted on October 14, 2008
Categories: Credit Karma, Credit Reports & ID Theft Protection, Finovate

The next presenter is Kenneth Lin, CEO of Credit Karma and Nichole Mustard.

Credit Karma has developed an ad-supported, free credit-report service that launched earlier this year. The company first showed its service at our Finovate Startup conference in April.

What’s new
Credit Karma showed credit score trends by Internet service provider, with Gmail users leading the pack.

Credit Karma today is introducing a credit card simulator, which lets you run what-ifs on what would happen to your score if certain things happened. For instance, it shows that if you applied for a new credit card, the example score would drop 15 points. If a late payment occurred, it would drop more than 50.

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Centrro Launches KnowBeforeYouApply.com

By Jim Bruene Posted on October 7, 2008
Categories: Credit Karma, Credit/Debit Cards, Launches, Lead Generation

Providing free credit scores in exchange for viewing a credit card offer seems like a reasonable value exchange (see note 1). That’s why we gave Credit Karma our OBR Best of the Web award in August and why it is on stage next week at Finovate (see previous coverage here, video at Finovate Startup here).

It’s also no surprise that others would try the same model. Credit crisis or not, credit-worthy borrowers are still a valuable commodity. Case in point, Bankaholic’s recent acquisition by BankRate for a reported $15 million, or $50 per unique visitor (Mashable post here).

The latest entry in free-credit-score lead generation is KnowBeforeYouApply (KBYA) from Centrro, a financial-search company founded in 2006 by Ike Eze and Tuyen Vo. Eze was a founder of QSpace, an OBR Best of the Web winner in 1997 when it became the first company to make credit reports available online (archived OBR article here). QSpace was acquired by Experian several years later.

KnowBeforeYouApply launched on Sept. 3, but was put on the map with Mr. Eze’s post today in The Huffington Post entitled, “Stay Away from Me, Credit Card Crisis” (see note 2). The article discusses the value of tracking your credit score and using that knowledge to find the best credit offers. Eze mentions his company along with Credit Karma, Quizzle from Quicken Loans, two other Finovate presenters, Mint and BillShrink.

Using KnowBeforeYouApply.com
It would be difficult to make the site any easier to use. Customers type in their name, address, email address, and last four digits of their social security number. Apparently, that’s all that’s needed to access your credit file and return a letter grade of A through F.

The whole process takes about 30 seconds (there is no need to enter an entire social security number), and KBYA steers clear of those pesky out-of-wallet authentication questions. Users can get an update of their credit grade every 90 days. In comparison, Credit Karma, which provides an exact 3-digit credit score, will update it daily if the user so desires.

KBYA also has a simple and intuitive sales platform. Just two offers were highlighted in the main screen, one from Chase and one from American Express (see first screenshot below). However, clicking through to “see all offers” led to 25 pages of credit cards, displayed five to a page (121 total for A-grade credit). A handy index along the sidebar allows users to find various categories that most appeal to them such as “travel rewards” or “0% intro rate” cards (see second screenshot).

KBYA appears to use the API from CardOffers.com to build a portion of its database of card offers. CardOffers.com offers its affiliates up to $20 per application or up to $160 per approved application. KBYA also appears to be an affiliate of Credit.com and Discover Card (see note 3).

The site is focused solely on credit cards for now. But a Home Loan tab is built into the user interface, with a “coming soon” label.

Analysis
All in all, it’s a good service. The site needs to beef up its FAQs, About Us, and other educational materials so users can better understand who is behind the service and what exactly the credit grade means. But as a month-old beta service, it’s presumably coming.

While I prefer the precision and peace of mind of seeing my actual credit score, a letter grade every 90 days will be sufficient for many users and should help keep costs down. And the speed of the application process and lack of social security number are real benefits.

Financial institution opportunities
Banks, credit unions, and card issuers should consider offering similar functionality both inside online banking, where private info would already be known, and on the outside where prospective loan customers could use it. With info about the customer’s credit grade, lenders could deliver tailored offers that could lead to increased application volume and approval rates. See our recent Online Banking Report for more info on lead generation sites (note 1).

Know Before You Apply main page after login (7 Oct 2008)

KnowBeforeYouApply all-offers page (7 Oct 2008)

Notes:
1. For a thorough discussion of the topic, see our August 2008 Online Banking Report on New Models for Lead Generation.

2. Strangely, the article doesn’t specifically disclose Mr. Eze’s affiliation with Know Before You Apply, although clicking on his name does show he’s CEO of Centrro. However, it’s left to the reader to discover on their own that Centrro is the parent of Know Before You Apply. Hopefully, that oversight will be corrected.

3. The affiliate relationships
are inferred from the redirects that take place when clicking on the Apply Now arrow.

4. This is one of the ten online finance companies that launched in Sept. (post here).

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New Online Banking Report: New Models for Lead Generation

By Jim Bruene Posted on July 9, 2008
Categories: Best of the Web, Credit Karma, FiLife, MoneyAisle, Online Banking Report

Our parent publication, Online Banking Report, has published a new report: New Models for Lead Generation: How auctions, community recommendations, product placements, and specialized search provide alternatives to Google AdWords.

Not only is this the longest report title in our history, it’s the first time we’ve looked specifically at lead gen sites (click on the Table of Contents right, to download the abstract).

The report was inspired by MoneyAisle, an auction-based retail deposit market, that debuted June 9. Although a few kinks need to be worked out, we are impressed by its work and are awarding it the second OBR Best of the Web this year (see note 1 and Credit Karma below).

But auctions were not the only new lead-gen model we looked at. Others included:

Community-based deal finders such as Credit Karma, the winner of our third OBR Best of the Web award for 2008 (see screenshot below, watch Finovate Startup demo here), SmartHippo (demo), and FiLife which also launched in June
Specialty financial search services such as BancVue/FirstROI’s CheckingFinder (coverage, demo) and Mortgagebot’s Mortgage Marvel (coverage, demo) both Best of Show winners at Finovate
Product placement in financial tools such as Mint (coverage, demo), Credit.com, FindABetterBank (demo), and Credit Karma

The report, which includes a 10-year forecast for auction and personal finance community involvement, is available as part of an annual Online Banking Report subscription or it can be purchased individually for $495 here.

Next month: New security technologies your customers are going to love, or not.

Screenshot: Credit Karma offer page: Countrywide’s high-yield savings offer is rated positively by 53% of Credit Karma users and earns a composite score of 63% which also factors in clickthrough rates and exclusivity, see box in upper right (9 July 2008)

Note:
1. The first winner in 2008 was SmartyPig (here). Best of the Web awards are given for new products/features that “raise the bar” for online banking. It is neither an endorsement of the company, nor the product itself. See previous coverage here.

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Updates on Credit Karma, Prosper, and GlobeFunder

By Jim Bruene Posted on February 27, 2008
Categories: Credit Karma, GlobeFunder, P2P Lending, Prosper

Here are three updates I've added to the posts from the last week:

Credit Karma, which we discussed here last week, is in private beta. But they have agreed to give NetBanker readers the invitation code to come in and kick the tires: CKFRND. Let us know what you think.
Prosper, discussed here yesterday, was named one of the Fast 50 2008, the 50 most innovative companies in the world by Fast Company magazine (here). The list is in the March issue.
GlobeFunder: I finally caught up with GlobeFunder founder Ben Decio last week. I noted in my NetBanker post a few weeks ago that the company was not yet accepting money from individual lenders. It sounds like that may be permanent. The company's current business plan is to use money from institutional lenders to fund all loan requests. That doesn't alter the value proposition to borrowers, since money is money, but it does move the company out of the P2P lending space.

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Free “Ad-Supported” Credit Scores from Credit.com, Credit Karma, and Quicken Loans

By Jim Bruene Posted on February 19, 2008
Categories: Credit Karma, Credit Reports & ID Theft Protection, Credit.com, Experian, Quicken Loans, TransUnion

In August 1997, QSpace (now owned by Experian) was first to bring credit report data to the Web. The cost was $12 per report (see note 1), a price that has changed little over the ensuing 10 years.

Three years later, in October 2000, WorthKnowing.com introduced the concept of ad-supported (i.e., free) credit scores (see Online Banking Report, #66, article reprinted here). But the company failed to make it through the dot-com crash and ceased operations (note 2). Both QSpace and WorthKnowing earned OBR Best of the Web awards for their innovations.

It took seven years for the concept to reemerge, but now two Bay Area rivals are offering free credit bureau info in exchange for permission to present credit and other product offers. And just as I was about to finish this post yesterday, Quicken Loans introduced Quizzle, a personal finance/credit portal that also offers free credit bureau info (yesterday's post here).

Here are the players:

Credit Karma: This San Francisco-based startup, with backing from Prosper's Chris Larsen, is delivering an actual credit score computed by TransUnion, one of the three major U.S. credit bureaus. It does not precisely match the commonly used FICO score from Fair Isaac. And the scale is different, with a top score of 900 instead of 850. The credit score service is still in closed beta, but we'll see if we can get some invites from the company. Credit Karma will be presenting at our FINOVATE Startup conference April 29 in San Francisco, if you want to meet the team behind this new service.
Credit.com: Another San Francisco company, but one that dates back to 1995, recently launched a similar system, called the Credit Report Card. Credit.com CEO, Adam Levine, presented his other company, Identity Theft 911, at our inaugural FINOVATE conference last fall in NYC (video here). Credit.com provides a full evaluation of your actual TransUnion credit report and assigns letter grades to five different components of the overall score (see third screenshot below). The score is shown on a chart at the top that appears to top out at 850. The report is extremely well done. Like Credit Karma, the company earns fees from targeted offers. In our case, we were given a choice of applying for two Citibank cards.
Quizzle powered by Quicken Loans: Quizzle's business model is completely different because it's run by a financial institution instead of a lead generation site. The idea here is to get customers and prospective customers to use Quizzle frequently so that when the time comes for a new mortgage, the user remembers to apply at Quicken Loans. See yesterday's post for a complete overview.