'New to credit' shouldn’t mean 'too risky for credit', with Charlie Wise (TransUnion)

How to Lend Money to Strangers

Brendan le Grange

Credit, Fintech, Management, Lending, Banking, Business, Careers

5 • 2.6K Ratings

🗓️ 20 April 2023

⏱️ 29 minutes

🔗️ Recording | iTunes | RSS

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Summary

About five years into my time in Hong Kong, I slipped my foot into a shoe only to bump into a frog sleeping inside it. Rough calculations say that, by that stage, I’d slipped a foot into a shoe 3,650 times in the city so the odds were greatly stacked in my favour. And yet, so great was my shock, and so increased was my awareness of what might slip under the door, that I checked every shoe every morning from there on out.

Lending is similar. The pain from the one loan you lose can overshadow the joy from the nine, or even ninety-nine, that pay you back. So you take precautions. You tip over the shoe. Or maybe you’re more scared of frogs than I am, and you poke a stick in there. Fair enough. But sometimes, those precautions become overkill. Maybe you’re that scared of frogs that you won’t settle for anything less than one of those bendy cameras surgeons use. Unfortunately, you don’t have one of those bendy cameras surgeons use so you go barefoot.

Or, if we bring this back to lending, new to credit borrowers get turned away, not because they’re risky, but because lenders lack the data we want to be one hundred per cent sure they’re safe. Lenders are too scared of frogs.

The study we’re speaking about is here: https://content.transunion.com/v/english_report_empowering-credit-inclusion-a-deeper-perspective-on-new-to-credit-consumers

And as we mentioned, your local TransUnion homepage will also have links to the country-specific versions where those are available: the USA, Canada, South Africa, among others.

Charlie can be found on LinkedIn at https://www.linkedin.com/in/charlie-wise-959570/

You can learn more about me on my LinkedIn page, my action-adventure novels are on Amazon, some versions even for free, and my work with ConfirmU and our gamified psychometric scores is at https://confirmu.com/ and on episode 24 of this very show https://www.howtolendmoneytostrangers.show/episodes/episode-24

Oh, and I'll announce it properly, but I'll be recording an episode of this show at Money2020 Europe in June so if you're going to be there, too, let's meet up. And if you're not, but you would still like to participate in the show, reach out to me at https://www.howtolendmoneytostrangers.show/contact-us

Regards, Brendan

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Transcript

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0:00.0	Diversify your investments, they say.
0:02.0	Know your unicorns from your zabras, your Nasdaq, from your Nikke.
0:05.5	Thankfully, diversity doesn't have to be difficult.
0:08.3	With one simple investment, F&C Investment Trust gives you access to 400 of the world's best companies
0:13.9	and a dividend that's grown for 50 years.
0:16.2	Visit fnc.com.
0:17.8	It's smart to start with F&C.
0:19.9	Capital is at risk and you may not get back the amount invested.
0:22.4	A group by Columbia 3D Management Ltd. on the 1st of the 2nd, 23,
0:25.5	although rising regulated by the financial conduct authority,
0:28.0	there's no guarantee that dividends will continue to grow.
0:33.0	The idea that all new Democratic consumers are high-risk
0:36.8	and let them improve themselves with somebody else before you take them on,
0:40.3	that's really one of the things that we wanted to debunk as part of this study.
0:47.2	My very first job out of university was at a bank.
0:50.9	In the weeks before I started, I visited my local branch
0:54.3	and with only my offer letter in hand, signed up for an account,
0:58.4	an overdraft and my very first credit card.
1:01.8	A few years later, when I was buying my first house,
1:04.8	I got a pre-approved staff mortgage at the very best rates in the market.
1:08.6	In other words, me, the guy who was so often designing the strategies
1:13.1	that provided credit to the market had no idea what it meant to be new to credit or credit invisible.
	...

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