Earlier this year, LendingTree launched a new product called My LendingTree. While you can get a free credit report from a number of companies these days, LendingTree went a lot further by taking the time to explain all the things that positively and negatively impact your credit score - and what to do about them.
I'm interested in this development on two fronts. First, every business owner should be looking to maximize his or her credit score, as the better your score, the more financial options you have to access cheap money. That is, with a terrible credit score, your credit cards and various loan options will be more expensive. But with an excellent credit score, you have access to the best (and most cost effective) financial tools available for your business needs.
More importantly, I'm interested in this development because it's the beginning of a new trend whereby big businesses are giving consumers direct access to their own Big Data. I sat down and had a video interview with Nikul Patel, the Chief Product and Strategy Officer at LendingTree and spoke with him about empowering consumers with Big Data.
Giving Your Customers Access to Their Own Big Data
Just for a second, think about just how much data companies have stored on you and everything you do. According to the Wall Street Journal, Facebook and Google have dominated the digital advertising market securing $0.77 of every new dollar invested because of their treasure troves of data.
And that's been the trend up until recently. Multi-billion dollar conglomerates collect, store and analyze big data to give them a competitive advantage. Meanwhile, consumers rarely have access to the very data that companies are collecting on them. This is why LendingTree is taking a very different approach by creating a consumer portal that gives consumers access to their own data - not just their credit scores, but also the specific actions that are both helping and hurting their scores as well as things like changes in their home values and recommended credit cards and personal loans to help pay off higher-interest credit card debt.
Turning Big Data On Its Head
"The important piece of missing data is the home valuation," says Patel. "The home is the biggest asset that most Americans have; it is by far the biggest asset and investment they have made in their life." And while not everyone knows the value of their home, they usually know the amount of money they need to borrow. What they may not know, however, is the best option for getting that loan.
This is where Big Data can have a significant impact on financial decisions. If you knew you needed to borrow $30,000 for your child's tuition, you could get a personal loan, advance money from your credit card(s), or open up a home equity line of credit. In addition to your credit score having impact on each of these options, there may also be tax advantages to leveraging your home for the loan versus leveraging your credit cards or opening a personal loan.
The point here is that when consumers are empowered by their own data, they can make better decisions that positively impact their overall financial health as well as their credit score. Knowing your options (and their impact on your finances) is the first step to making better financial decisions.
The Big Picture of Big Data for Consumers
Let's extrapolate here so that you can see why this is an important and exciting trend. If every time you received your utility bills you saw how your electric, gas and water usage compared to your neighbors, you could tell if you were conserving or using more than the local average. If you were then able to compare at a state and national level, you could see how your monthly expenses compared to others.
When looking to cut back on your expenses, wouldn't it be great to know where you stand versus your neighbors and the state and/or national average? Perhaps you want to know if you are paying more for car or home insurance than you should be.
When financial decisions are no longer made in isolation, individual consumers are empowered to make better decisions. This can be applied to just about any industry. It just takes some extra effort to build this into a standard business practice.
Just as advertised calorie counts are impacting the food choices we make at restaurants, Big Data could one day impact a number of the buying decisions we make each day.
LendingTree has taken a great first step with My LendingTree for personal credit score improvement, and the opportunity exists for many businesses to deliver their own Big Data insights to their customers. Not only will this empower your consumes to make better and more informed buying decisions, but it will also provide more benefits to the very consumers who have agreed to allow you access to their personal data.