Credit Savvy is looking to follow in the footsteps of Credit Karma in the US and disrupt the credit reporting market in Australia.  The general manager, Dirk Hofman, told Mortgage Business’s sister publication Fintech Business that his company’s free service aims to displace the paid models of Veda and Dun & Bradstreet.

“Credit Savvy is also very much geared around the new Comprehensive Credit Reporting regime, which is likely to change the way credit scores are calculated.  In today’s regime, they may see that you have five credit enquiries over the last five years. They don’t know if those accounts are closed, open, whether it has been approved in the first place.  Getting more transparency is a good thing. We fully support transparency of that data, and we think it’s a good for consumers,” Mr Hofman said.

The company, which launched in March following a 12-month development, provides its members with free access to their credit score as well as a monthly update. Credit Savvy is an attempt to replicate the success of Credit Karma in the US, which boasts 40 million members – around one in eight Americans.

The Australian start-up uses the global credit score database of Experian to provide members with their credit score.  Members are then referred to a relevant home loan, credit card and personal loan products. These referral arrangements along with on-site advertising comprise the bulk of Credit Savvy’s revenue.

Mr Hofman said the biggest challenge for his company is raising awareness about credit scores among Australian consumers.  As well as providing members with their credit score (and monthly updates) for free, Credit Savvy also publishes a range of articles on credit reporting to better educate consumers. Credit Savvy is looking to do more than simply help people with a good credit score get a better interest rate on their loan or credit card, according to Mr Hofman; the firm also aims to deter those with a bad credit rating from making it worse.

On the positive side, Credit Savvy has relationships with peer-to-peer lenders RateSetter and SocietyOne to offer members with high credit scores favourable interest rates on personal loans.  Above all, Mr Hofman is keen to stress Credit Savvy’s independence from CBA and the fintech firm’s direct owner, Aussie Home Loans.

Source: Mortgage Business

Editorial comment:  According to Credit Savvy, it has partnered with Experian, one of the three Australian credit reporting companies, to provide members with free and ongoing access to Experian’s credit score and credit information.  It merely passes on information to its members that is already held by Experian.  Credit Savvy is not a credit provider and does not offer loans to its members.  Credit Savvy’s revenue comes from advertising and from lead referral arrangements with a wide range of financial service providers.