As part of the afternoon focus on credit worthiness, Ben Rogers, Driver of the CU Tomorrow Initiative at Filene Research Institute, presented on building credit with young adults.
First, he laid out the environment for attendees:
• Younger people have lower scores
• It takes five to six years of debt repayment history to build an ‘A Paper’ resume
• Young people are more likely to earn low and sporadic wages, making them more likely to miss payments
• Credit report market could be worth $860 million by 2010 (USA Today)
Ben then detailed the credit union response – “There are three pieces to effective credit score programs for youth: education, marketing and financial products. Education is a good start, and it's where most CUs do start, but it needs to be coupled with marketing and tangible products to be most effective.”
One of the most intriguing examples that Ben discussed was one from Beehive CU (
Another interesting example out of Filene’s I3 project is SmartScore. The project is pure marketing:
• Target a group of members, easier if you have recently pulled scores
• Mail them their score with information about how to improve it
• Follow up quarterly with updated score, further information
• Offset costs by cross-selling
Click the link above for a detailed business plan and summary.
Before he spoke, I asked Ben why serving 18-to-30s is so important for credit unions. He responded:
There are two ways to look at the youth issue among credit unions: 1) We need to move the average age of members down, 'nuff said; and 2) We have a chance to reinvigorate credit unions as the first choice for their financial institution, not just another among equals for young people.
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2 comments:
Christopher - I think this is one of the most important things to come to light at your conference. I explained about how to use Facebook at no cost to promote your CU events at the workshop that we did on Wednesday in Lake George.
BTW, I agree with you completely--20 should be considered a grand slam. My question for Beehive is why didn't they ALSO use every other marketing channel that they normally would to promote the event too? Why wouldn't they use Facebook as an ADDITIONAL way to get the word out?
One last note -- it was really cool to twitter with Brent while he was at your conference and sitting with Justin Ho. One person in our group asked him what the average age was of his Board, and we heard back via Brent that it was 57. Too bad we couldn't get some of your Austin warmth up in New York while we were at it. I hope twitter fixes that in their next version. :)
I just looked up Beehive's facebook forray in that space. They didn't do it quite right... but still got a tremendous response. This has the potential to be truly huge. There are potentially millions of credit union members out there who are EAGER to learn about how to improve their credit, and would LOVE to come to a seminar about how to do it. Congrats to Beehive on being innovative, and I hope they pick up the ball again. There is a rather large opportunity here.
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