A recent Experian survey found that 21 percent of consumers said they would consider purchasing a vehicle in the next six months if they could shop credit offers and apply via mobile device quickly and securely.
As a result, Experian on Tuesday unveiled Text for Credit, what the credit bureau is calling an industry-first technology that transforms the way consumers secure credit.
The company acknowledged traditional means of obtaining credit often can be slow and tedious, and providing sensitive information on paper in public spaces can expose consumers to risk.
Experian explained Text for Credit can allow consumers to initiate and complete the credit application process within minutes with a simple text message. For instance, consumers interested in taking advantage of a store credit card incentive can secure that card through their mobile device — a particularly exciting innovation considering smartphone ownership is nearing 100 percent for adults aged 18 to 44.
“Technology has brought vast improvements to consumer banking, insurance and investing services, but the credit application process has remained largely unchanged,” said Alex Lintner, Experian’s president of consumer information services.
“With Text for Credit, consumers will get real-time access to credit, creating a better experience for the consumer and increased conversion for lenders and businesses,” Linter continued.
In that Experian survey, consumers were asked to identify their top three concerns about applying for credit or financing in a retail location. More than half (58 percent) cited privacy concerns, and 42 percent cited the length of time it takes to apply. These concerns translate to lost revenue — 12 percent of consumers said they have walked away from a purchase because it was taking too long to get approved for credit, while 16 percent have walked away because the person in front of them was applying for credit.
Then Experian shared additional information with SubPrime Auto Finance News about consumer sentiment regarding auto financing and how Text for Credit can help dealerships and finance companies.
Consumers cited a car as their most stressful purchase — and much of that stress is attributable to figuring out financing. Experian asked consumers to rank the most stressful elements of car buying:
—High pressure sales tactics
—Cost of car
—Dealing with salesperson/finance manager to arrange financing
—The amount of time it takes to complete the purchase
—Wondering if you could get a better deal through different financing
—Choosing a model
Moreover, as mentioned previously, Experian pointed out that 21 percent of survey participants said they’d consider purchasing in the next six months if they could quickly and securely shop credit offers and apply via mobile device. Experian noticed that a vehicle was the second most popular item consumers were willing to purchase if they could quickly and securely shop for credit offers via mobile device.
Experian asked participants to select their top three concerns about applying for offers on the spot at a retailer.
—Privacy concerns about applying in-store (58 percent)
—Being over leveraged (55 percent)
—How long it takes to apply (42 percent)
—Dirty looks from customers in line behind you (31 percent)
—Fear of being declined in public (27 percent)
—Having to interact with a salesperson to apply (28 percent)
—The anxiety it causes while in the store (20 percent)
Experian followed up by asking if consumers could obtain the same credit securely through a mobile device, within minutes, would it ease concerns?
—Yes (47 percent)
—No (53 percent)
Thinking just about a buying car, Experian asked participants what elements are the most stressful. They’re ranked in order below from most stressful to the least stressful.
1. High pressure sales tactics
2. Negotiating price
3. Cost of car
4. Dealing with salesperson/finance manager to arrange financing
5. The amount of time it takes to complete the purchase
6. Wondering if you could get a better deal through different financing
7. Choosing a model
Experian reiterated that Text for Credit offers the speed, convenience and privacy necessary to solve these issues. The company maintained it’s as simple as it sounds:
• Consumers seeking credit text a keyword such as “CREDIT” to a short code supplied by a merchant or a credit issuer, the same way some retailers now allow consumers to “text to buy.”
• Consumers then receive a text message response that takes them to a hosted website where they can apply, review credit offers and receive an instant decision.
• In most cases, consumers will be recognized by their device credentials, which lets them avoid filling out a lengthy credit application.
• If approved, consumers will have immediate access to the credit via a barcode or account details sent to their device.
“Experian is taking the credit industry into the real-time economy with this innovative, convenient and confidential new way to apply for credit. For consumers, Text for Credit means no more paperwork, no more anxious minutes hoping for credit approval and dramatically reduced risk from a paper-extensive exchange of sensitive information,” Lintner said.
“In fact, consumers can find out what they qualify for before they come to a dealership or a retail store, and that can translate to big sales increases,” Linter went on to say.
Finance companies and dealerships interested in offering Text for Credit can visit www.experian.com/TextforCredit.