ConsumerDirect’s Steve Reger: ‘Banks Can Make Smarter Lending Decisions Based on Your Future Self’

Qa With Credit Expert Steve Reger From Consumerdirect

We’ve likely all seen the reports by now. Credit card balances remain sky-high with a reported $1.17 trillion in the third quarter of 2024.

For potential borrowers eyeing some of life’s most expensive purchases, such as your dream home or the shiny new car you’ve been eyeing at the Main Street dealership, a push to improve your credit score can be well worth the effort.

When it comes to borrowing costs, even a half percentage point improvement on a mortgage, can save a homeowner thousands of dollars over the life of the loan.

ConsumerDirect is known for its consumer-facing SmartCredit® product that helps people improve and monitor their credit scores. We recently sat down with Steve Reger, Executive Vice President of Sales, B2B Marketing & Fraud Prevention at ConsumerDirect, to talk about their partner channel offerings, including its myLONA™ Smart Lending platform, which is designed to help their partners engage with their customers.

How can financial institutions help borrowers qualify for better interest rates on their credit products?

The idea behind myLONA™ Smart Lending is for borrowers to make more intuitive lending decisions. So in other words, don’t think about what you qualify for today, think about what you could qualify for tomorrow. And if you take some concrete, actionable steps to get to tomorrow, it might be worth the wait.

Can you give us an example of what this looks like from a consumer perspective?

We provide potential borrowers with options and say, ‘OK, based on your credit score, these are the offers you’re qualified for. You can get a home loan, and it’s going to be at 7%. But we think that if you take some reasonable steps over the next four months, you could improve your score by 40 points and with that additional score increase, you’ll be able to qualify for these better offers.’

That’s our core philosophy. It’s smarter lending decisions based on your future self.

Your tools seem designed to foster engagement. How does a hands-on, personalized approach lead to better results?

The very foundation of SmartCredit® is built on gamification. We don’t want to provide static tools that are just information. We want tools that people can interact with. And as they interact, they then can take ownership in taking steps toward improving their credit score or protecting their identity. So we hear a lot of positive feedback that it aids with the consultative trusted advisor relationship they have with their end users.

What are the benefits of partnership when compared to building tools like this from scratch?

If you want to offer your customer base a credit monitoring product or tool, anybody can go out and build it on their own. But that requires several things. You know, it requires time and money.

More importantly, it also requires access to the data, which you have to get directly from the bureaus. The barrier to entry into the bureaus to get that data is typically prohibitive for most startups. And then if you’re not getting favorable pricing, you can’t then sell a product at a profitable price that’s competitive. Instead of doing it yourself, you can come to us, and then we can sell you something out of the box, ready to go.