Pave’s story: how we came to the idea of the Global Credit Profile
After 5 years lending to in the lending market we are proud to introduce our new product, the Global Credit Profile. The product is a culmination of everything we have learnt as online lenders and addresses the core problem faced by more than 2 billion people worldwide: a lack of access to credit.
Perhaps somewhat counter intuitively, we are solving the problem not by providing a new type of loan or credit card but by fixing the underlying issue: the data underlying credit decisions. Its well known that if you build a house on shaky foundations no matter how good the quality of timber or how ornate the decorations the house will eventually fall down. Unfortunately, the world of consumer finance is built on shaky foundations, the current day credit report that contains information about a consumer’s financial health represents the foundations and its builders and architects are the credit bureaus: Experian, Equifax and Transunion. Financial service providers spend millions of dollars building the equivalent of expensive houses (credit cards or loans) and services on these foundations and more often than not fail to provide real value to the customer. It’s not only the customer that suffers but so do investors, often losing much more than than they forecast.
We experienced this problem first hand when lending. The fundamental flaw with the current credit system is that access to reasonably priced credit is predicated on an individual’s credit score which in turn is normally based off an individual’s credit history as reported to the bureaus. 90% of lenders in the U.S. base their decisions off the a credit score provided by the Fair Isaac Corporation (“FICO”). The system is therefore system is therefore set up to prejudice those without a substantial traditional credit history, such as those new to credit or immigrants.
Our new product, the Global Credit Profile puts the consumer in charge of their financial data and gives them the ability to to access and control their own data at any time. In doing so an individual will be able to build a full financial profile that includes financial data, ranging from bank account data to credit cards, to rent and utility payments. The GCP will provide a richer picture of an individual’s financial health than is currently available through credit bureaus today.
The GCP also provides a solution to the security vulnerabilities of the way financial data is currently stored by the incumbent credit bureaus. By storing the data in a distributed manner using blockchain related technologies such as the IPFS protocol17, a central attack such as the Equifax breach mentioned above becomes an impossibility. Hackers would need to hack each user individually which would involve obtaining the individual decryption keys for all 145 million users.
Here at Pave, we’ve witnessed firsthand the struggle of good people held back in life without access to credit and the right, affordable products that credit can reward. We’ve also dealt directly with the institutional proprietors of credit data; the three US based, for profit companies who’ve been entrusted with the entire nation’s financial data. There are many challenges we’ve noticed in their technology, structure and processes. Unfortunately we’re now dealing with the biggest personal data breach in US history after Equifax was hacked in September 2017. With blockchain technology, cryptocurrency and our solution for a decentralized credit bureau, we’re able to fix these issues and completely transform for the better the credit industry and in turn the lives of millions of people around the world. Join our mission by supporting the Pave community and becoming part of our ecosystem. Let’s move forward and take credit into the future, together.
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