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.