Members of the nation’s largest community development financial institution will soon be able to build credit through their routine rent and utility payments with the help of Bloom Credit, the New York City-based infrastructure credit fintech announced Wednesday.
Tampa, Florida-based Suncoast Credit Union will begin offering Bloom+ to its 1.1 million checking account holders in November. The product will allow customers to automatically submit positive payment information on rent, telephone, gas, electric and water bills to credit bureau TransUnion based on automatic account payments.
Within minutes of signing up, Bloom+ will scrape a member’s account for rent and utility payments, retroactively establishing a credit profile with up to two years of data.
“Credit's always been this chicken-or-the-egg,” said Bloom Credit CEO Christian Widhalm. “If you don't have credit, it's hard to get credit.”
Roughly 45 million American adults are either credit-unserved or -underserved, according to TransUnion, meaning 18% have little to no credit profile.
Without sufficient credit, consumers are iced out of getting auto loan and mortgage approvals, and potentially overcharged for insurance and other credit products and overlooked for rental housing.
Darlene Johnson, Suncoast’s executive vice president and chief strategy and transformation officer, noted that Bloom+ users will be able to choose which bills they want automatically reported to TransUnion – a prospect she called “most intriguing.”
“It gives consumers complete control over some of the additional information that's provided to the credit bureau, which in today's world consumers really don't have,” Johnson said. “It also gives credit builders – those just starting out on their credit journey – the ability to get credit for things that they're paying every month. In some cases, for example, rent could be more than a mortgage payment. It’s nice to get credit for those positive payments.”
Bloom’s deal with Suncoast builds on its previously announced partnership with Navy Federal Credit Union, as well as multiple unannounced partnerships with fintechs that white-label Bloom’s infrastructure to help end users bolster their credit. At Navy Federal, Bloom+ is available to some 14 million members.
Though its first two major partnerships are with credit unions, Bloom is eyeing banks, too. Widhalm said the company will soon launch its first bank partnership and is in talks with “probably five of the top 20 banks.”
While Bloom reports only to TransUnion, Widhalm said he’s in talks with both other major credit bureaus, Equifax and Experian.
Suncoast expects to debut a revamped mobile app in April, so from November until then, Bloom+ will be available for members through a link on the credit union’s website. Suncoast plans to roll out Bloom+ methodically, Johnson said, beginning with members who need it most.
“What we're trying to do is strengthen [members’] credit portfolios so that they can borrow dollars that they need, whether it be for car or for homeownership long-term, and we're able to give them a better interest rate because they've improved their FICO score,” she said.
Johnson said she hopes the product will give members “the ability to borrow differently.”
“Any time we can improve the financial well-being of our members, it helps Suncoast holistically,” she said.
Because the payments Bloom submits to the credit bureau must be paid through ACH, it gives Suncoast the opportunity to grow member engagement, Johnson said. Through engagement, “it helps us understand our members’ spending behaviors and saving behaviors so we can present to them the next best products.”
Offerings like Bloom+ can be a boon to credit unions, whose members tend to skew older, Widhalm said.
“They're … [asking], ‘How do I drive relevance with this next generation customer?’ It needs to go beyond just a marketing message,” Widhalm said. “It needs to be a product that can come in and really drive relevance, really be what the consumer needs.”
