Good credit can open the door to great opportunities. Unfortunately, the way in which the consumer credit system is designed has prevented many people from succeeding. Sunrise Banks strives to be part of the solution by partnering with financial technology (fintech) companies and other organizations that reflect our mission of financial wellness and inclusivity.
Episode three of the podcast Social Currency, powered by Sunrise Banks, features Self Financial, Inc. (Self), one of the leading changemakers in the credit industry. As longtime partners, Sunrise Banks provides the support behind certain credit building accounts that Self offers. This collaboration allows both groups to maximize their efforts toward more accessible and equitable banking.
In this episode of Social Currency, our hosts Tyler Seydel and Eric Schurr sit down with Paul Brady, Self’s Senior Vice President of Risk, to hear more about the company’s mission to make credit building accessible.
At the top of the discussion, Seydel points out that many individuals looking to improve their credit don't know where to start.
“It feels a little bit circular, like chicken or egg,” he says, explaining that it takes credit to get a good credit score, but that it is a challenge to get credit without a good credit score.
Self launched in 2015 as a force to address this very issue.
“It’s very hard to build credit if you don’t have it,” explains Brady. “The reason our products exist is to allow customers to do that.”
Making credit building opportunities more accessible
Before starting Self, founder James Garvey had his own personal experience with poor credit following a mistake with his credit card. As Garvey worked to rebuild his credit, he came face-to-face with the barriers many Americans with low or no credit are up against.
With the understanding that the traditional means of gaining good credit are often challenging, Garvey introduced a Credit Builder Account as Self’s initial offering.
The Self Credit Builder Account enables customers to open a secured installment loan, with the proceeds of the loan being put into a savings account. After customers pay down the loan, they can receive access to the funds in the savings account, minus any interest and fees.
“Credit builder accounts back then were fairly unique, especially in the world of online lending,” Brady says. “There are more companies offering it online in the fintech space now, but I would say we were on the leading edge of doing that, at least in the fintech world.”
With growing competition of similar accounts in the marketplace today, Brady identifies a significant differentiator that makes Self’s credit builder account stand out.
“One very key point for us is about 40% of our customers are referred from existing customers,” he explains. “So, we have a very loyal and fantastic customer base that we rely on to continue to grow. And, obviously, we are not resting on our laurels. We are continuing to work through new products, new innovations and changes to existing products.”
Elevating credit building tools
In 2019, Self launched another tool for building credit, the Self Visa® Credit Card. It can be used anywhere Visa® credit cards are accepted in the U.S.
Self’s Credit Builder Account holders who meet the income and eligibility requirements can open the secured credit card.⤉ Customers can choose the amount of savings progress to use to secure their credit card deposit and set their credit limit.
“This gives customers more immediate access to the savings they have built up,” Brady explains. “These products work hand-in-glove together to provide customers both an ability to build credit and start getting utility from the credit card.”
By not having a traditional application process – including a hard credit check – Self’s secure credit card provides more people with the opportunity to build credit, even if they have had poor credit in the past.
“We are the only card in a fair number of our customers’ wallets, so there’s definitely some value derived out of just being able to use a card out there on your daily purchases,” Brady says.
Meeting customers where they are
When it comes to a person’s credit score, payment history makes up 35%* of that number. With that in mind, Self saw an opportunity to help customers build credit just by reporting what is their largest monthly expense.
The company now offers a tool that reports customer on-time rent payments to all three credit bureaus for free.**
“That is another key cog in the credit building world that we have at Self–bringing in that next level of innovation where you don’t necessarily need a loan or a credit card in order to start building credit with the credit bureaus,” explains Brady.
“With a large majority of our customers being renters, this gives them the ability to start building their credit through what they are already doing, through bills they are already paying,” he adds.
For a low monthly fee, Self also offers a plan that includes the reporting of cell phone and utility payments to TransUnion. The paid plan also provides credit monitoring and identity theft insurance up to $1 million.
Brady says that Self is committed to identifying customer needs and creating tools to fit them and help them continue to build credit. “This gives us another dimension into working to meet our customers where they are.”
Leaders in customer education and empowerment
Consistent messaging to customers is important for Self. The company provides customers with their credit scores when they have an account and educates them on the factors that can influence their credit scores.
“We saw, through a survey, that 72% of our customers said they had little or no financial education growing up,” Brady says. “That’s certainly a key focus for us, as well as continuous education, because we want to continue to build these habits.”
“Self is one leg of a much larger credit world for our customers,” he continues. “If we can start educating building good habits here, we anticipate our customers will be able to continue to build those habits elsewhere, as well.”
Sunrise Banks is now in its seventh year of partnering with Self to support and serve customers on the path to financial inclusivity, while shining a spotlight in the market on the challenges of building and repairing credit.
A critical outcome of this partnership is a focus on customer empowerment.
“We are all about empowering our customers,” Brady remarks. “We feel we are not going to do the whole journey for our customers in building their credit, but we are absolutely building solutions that empower them to do that.”
To date, Self has served more than four million people on their credit-building journey.
Check out the full conversation with Brady on Social Currency. You’ll hear how continuous learning is at the core of Self's DNA, its view on competition, the company’s focus on innovation, and much more.
The Social Currency podcast, powered by Sunrise Banks, introduces listeners to some of the most innovative changemakers in fintech and ESG (Environmental, Social and Governance) (environmental, social and governance). It highlights their efforts to dismantle barriers and reshape their industries for a more inclusive, equitable and sustainable future.
Check out our full lineup of episodes on our website.
Nicole Rothstein is a freelance journalist and writer based in Cleveland, Ohio.
Credit Builder Accounts & Certificates of Deposit made/held by Lead Bank, Sunrise Banks, N.A., SouthState Bank, N.A., First Century Bank, N.A., each Member FDIC. Subject to credit approval.
The secured Self Visa® Credit Card is issued by Lead Bank, First Century Bank, N.A., or SouthState Bank, N.A.
⤉ The secured Self Visa® Credit Card requires an active Self Credit Builder Account and qualification based on other eligibility criteria including income & expense requirements. Criteria subject to change.
*www.ficoscore.com/education#WhatYour
**Results vary. You may not receive an improved credit score. Not all lenders use scores impacted by rent/utility payments.
Self does not provide financial advice. The content on this page provides general consumer information and is not intended for legal, financial, or regulatory guidance. The content presented does not reflect the view of the Issuing Banks. Although this information may include references to third-party resources or content, Self does not endorse or guarantee the accuracy of this third-party information. Any Self product links are advertisements for Self products. Please consider the date of publishing for Self’s original content and any affiliated content to best understand their contexts.