Young adults and students often leave college with a bad credit score resulting from college debt, thus receiving higher interest rates and APRs on loans, making it difficult to buy a car or rent your first apartment out of school. Hatch Credit solves this problem through its mobile app that is focused on helping students build their credit scores through non-traditional data points like Netflix and other recurring payments. The target market for Hatch Credit is enormous, approximately 11M out of the 21M college students do not have access to traditional means of building credit. Hatch Credit hopes to change this and is starting by focusing on students in the 220 schools across California.
LA TechWatch spoke with Director of Public Relations Shamara Carney to learn more about Hatch Credit and its future plans to enable students to build credit histories to make the financial system more inclusive.
Tell us about the product or service that Hatch Credit offers.
Hatch Credit has developed a mobile app that allows users to build their credit score using non-traditional data points, such as rent, Netflix, utilities, and other recurring payments.
We do this by furnishing on-time payments from our users to the US Credit Bureaus. This data can be backlogged up to 2 years, allowing users to see a significant boost in their credit score in under 2 weeks. This is much faster than the 6-8 months it takes to build your credit using a credit card or loan.
How is Hatch Credit different?
What makes Hatch special is that we have built a student-focused solution. Young adults and students enter college in debt and leave college with a bad credit score from this debt (the national average is ~500), which ties to higher interest rates and APRs on loans that cause problems like the student financial crisis. By helping students build credit, we help students pay back college loans, save money on interest rates, and leave college with a strong credit score and financial standing.
All though we focus on students, anyone can sign up and use the Hatch Credit app!
What market is Hatch Credit attacking and how big is it?
We are tackling the college financial crisis and the market surrounding it.
For market sizing, out there are 21M college students in the US with 2.1M students starting college each year. Out of this 21M, ~11M don’t have viable means of building their credit. With our current rate of adoption with universities, we’ve set an internal goal of reporting 70-100K students by the end of this year with a focus on the 220 schools in California.
What is the business model?
We generate revenue primarily through affiliate marketing, helping banks reengage the college market, and furthermore helping students get their first credit card.
Who do you consider to be your primary competitors?
Our main competitors are those following us in the domain of non-traditional credit building. There is an era of democratizing finance, and we plan to be the leading name in the space.
Tell us a little about your background and what inspired the business?
Coming from a military family of nine, Hatch Credit CEO, Michael Broughton needed a loan to cover the remaining $10,000 he owed USC for tuition… only to be denied. After being disqualified due to a lack of a credit score, he was told he needed to show proof of credit history. The issue? Traditionally, one needs a credit card or loan payments to prove their credit history, even though Michael, like most students and young adults, had neither. Out of his frustration and through a lot of research, he founded Hatch Credit.
Tell us what building your company in LA has been like?
Hatch Credit was born and raised in the heart of LA on the USC campus. This allowed us to examine the LA startup landscape from up close. Also, it has been a great learning lesson
competing in local pitch competitions which exposed and connected us to successful startups to learn from.
What are the milestones that you plan to achieve within six months?
We plan to help over 100,000 students before the end of 2020, despite COVID-19 and other current global challenges. Our mission of democratizing finance is a nationwide problem that people are eager to see be solved.
We plan to help over 100,000 students before the end of 2020, despite COVID-19 and other current global challenges. Our mission of democratizing finance is a nationwide problem that people are eager to see be solved.
If you could be put in touch with one person in the LA Tech tech community who would it be and why?
One person we would love to speak with is our governor. There is a mission by our state to help push financial literacy to our schools and younger audience and working with the state of California to push this mission forward would be an amazing opportunity.
What does being “Made in LA” mean to you and your company?
What being “Made in LA” means to Hatch Credit is being made to compete and navigate through the chaos.
What else can be done to promote early-stage entrepreneurship in Los Angeles?
More features, highlights, and interviews with startups to connect them to the LA public. Also, more events to encourage the entrepreneurs to come together and create more of a community with one another.
What is your favorite restaurant in LA?
Our team loves to eat at Public School 213.
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