Move Over Credit Score, New Tool Helps Users And Lenders Evaluate Credit Potential

Harvest Platform has launched a new tool to help lenders make better credit decisions—and, in the process, help consumers gain access to much-needed credit.

Its PRO Index moves beyond just the decade-old credit score as a barometer of credit-worthiness. Rather, it also takes into account a user’s debt as a percentage of income and expenses as a percentage of income. It a nutshell, it assesses a user’s ability to keep on top of debt, as well as their overall expense obligations and spending habits.

This broader metric is especially important amid the pandemic, which has wreaked havoc on the finances of many consumers, Nami Baral, founder and chief executive, tells Forbes in an interview.

Consider a Finicity survey of 2,000 U.S. respondents in June that noted 55% of respondents have lost their jobs or had their income impacted because of Covid-19. Given the financial hardship, 61% of the impacted are worried about harm to their credit. What’s more, nearly all (95%) of the impacted are apprehensive about their ability to rebuild their credit and finance purchases down the road—even after the pandemic passes and recessionary conditions abate, according to the Finicity report.

That’s where the PRO Index can be especially useful. Credit score is a historical analysis, but used alone, it doesn’t give the full picture of a consumer’s potential, Baral says. Combining that with factors related to a customer’s spending habits and their ability to pay makes for a much stronger indicator, Baral says.

Harvest has NY-area credit unions signed up, a spokeswoman says. Lenders pay a per user per month fee to help them better understand the financial wellness of their existing customer portfolio.

Harvest Platform launched in 2019 with the stated goal of helping consumers increase their net worth. Its first product, an automated fee negotiation tool, has hundreds of thousands of users, Baral says. The tool helps users identify negotiable bank fees and interest charges and help get them refunded back to their account. There is no upfront cost for individual users. Harvest collects 25% for auto-negotiate, but only when customers get their money back.

So, for instance, if the platform identifies $250 in credit card fees and is able to get $150 back for the customer, the customer receives back 75% of that, or $112.50. On average, Harvest has a 90% success rate in getting some amount of refund for its users, a spokeswoman says.

The platform also offers users a debt dashboard, which helps users identify their debts and offers suggestions and insights on potential savings from modifying their debt payments.

The company has raised $3.2 million in two rounds of venture funding, from backers including Barclays Capital and Lakehouse Ventures.

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