Lazy Man and Money

SF Beta: Financial Innovation at Its Best

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On Tuesday there was a gathering of a number of financial start-ups in San Francisco. There are so many of them that industry’s leading conference, Finovate, has stretched to two days this year instead of the single day it has been in the past. Instead of being a big event like Finovate, this was more of an informal mixer. Lending Club and their main product guru Rob Garcia brought together a bunch of companies to create SF Beta: Financial Innovation.

With such an event in my backyard, how could I not go? Silicon Valley Blogger, her Digerati husband, and I carpooled up to the city to “mix.” I didn’t do much meeting with the attendees. There three main reasons why I didn’t. One, I’m quite shy. Two, I suspect Rob Garcia had some nefarious plan to intimidate me by hiring a bunch of runway models to pose as “attendees.” Three, I was really there to meet with companies and see what they were up to.

What did I learn? Over the next couple of weeks, I’ll go into more detail, but for now I’ll give a quick run-down:

  • Credit Karma – Credit Karma was there showing off its Vantage Score and its Auto Insurance Score. If you care about your credit (which you should) and haven’t signed up for Credit Karma, get to it!
  • Credit Sesame – After yesterday’s extensive review of Credit Sesame, I don’t need to go much more into it, except to say that Irene Shubladze is quite possibly the most friendly person in the world… seriously.
  • Zecco – It’s been awhile since I wrote about Zecco as I haven’t been trading with brokers much these days. Still, I think their ten free trades a month (for accounts with $25,000 or more) is one of the best deals in the industry. They showed off a Zap Trade feature, which is essentially a glorified GreeseMonkey userscript built into a Firefox plugin. For those who don’t speak geek, it edits other pages like CNN Money so that when you see a stock symbol on a story that you are reading, one click opens up a trading window. Zap, you’re investing! (They claim its patent pending, but this kind of stuff is built into products like Skype, and I demoed it for my start-up in 2004, so we’ll see how that goes).

And, of course, Silicon Valley Blogger covered SF Beta as well.

Credit Sesame: Free Credit Scores & Debt Management

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Being a personal finance blogger in Silicon Valley is a little bit of a unique experience. For one, the average home in my city goes for over a million dollars. That’s one of the major downsides, but today I wanted to write about one of the upsides. There are a lot of start-up companies technology here… and a lot of them are creating really interesting personal finance tools. I have the good fortune of meeting with some of these companies face-to-face and learning about their products. Many of them you’ll never read about here because I don’t find them all that innovative. However, today I’d like to introduce you to one that I think is: Credit Sesame.

A couple of days ago I got to speak with their VP of marketing about Credit Sesame. She gave me a tour of what it is and how it works. I’m going to share that vision through my (at times) skeptical glasses.

What is Credit Sesame and How Does it Work?

The simplest explanation is that it is a debt management tool. You give it access to your credit information and it goes out and pulls as much information about your outstanding as it can find. For example, it will find your mortgage, credit card debt, equity loans, car loans, etc. From there it creates a summary of your overall debt picture. You even get a nice graph such as this one:

Credit Sesame - My Finances
Credit Sesame - My Finances Section

(Note: This isn’t my actual data, it’s a test account. I’ll share you mine at the end of the article.)

While that graph is handy, you probably aren’t learning anything new from it. The greatest benefit of Credit Sesame is that it offers real suggestions that you actually qualify for. For example, the person above would get the following options (click for larger version):

Credit Sesame - Savings
Credit Sesame - Savings

If you look at the View Advice option from that menu you’d get a page like (again, click for larger version):

Credit Sesame: Advice
Credit Sesame: Advice

As you can see, you get a few options at the top to customize proposals. And off to the side, there’s a little calculator… almost hidden away. This calculator is my second favorite feature of Credit Sesame. (You know the drill by now, click to super-size):

Credit Sesame - What If Calculator
Credit Sesame - What If Calculator

You can test how changes in your financial situation may affect the proposals. This gives the user insight to how important a credit score can really be.

My favorite feature of Credit Sesame is actually a bit of a side effect of how it works. Users get a free credit score from Experian – one of the three major credit report bureaus. It’s not a FICO credit score that most banks use, but it is a good guide, especially for the price of free. Over time, I expect Credit Sesame to expand on this feature.

Partnership with Lending Club

On Wednesday, Credit Sesame announced that it had formed a partnership with Lending Club. It makes a lot of sense for both Credit Sesame and Lending Club. Lending Club will get a source of new loans brought to their doorstep. Credit Sesame will be able to present its users with an attractive option to save money.

If you are a regular reader, you’ll know I’ve been a supporter of Lending Club before. Rob Garcia, Lending Club’s Senior Director of Product Strategy, reminds me they are not dead as I once proclaimed… in fact they are thriving, having issued over $207 million in personal loans.

Prior to this partnership, Credit Sesame was mostly focused on helping people via debt consolidation loans that were primarily available to home owners. However, with this in place, those with simple credit card debt can reap rewards through Lending Club.

With Credit Sesame, “Standard Caveats Apply”

As with any online financial tool, there is a security concern. The Internet does get hacked and information is occasionally stolen. One could make an argument that a start-up is more likely to get hacked since it is typically busy focusing on adding features and creating value for its users. That said, when a service provides great value, it can be hard to ignore. Mint, a start-up just a couple of years ago, had so many users that Intuit bought them for nearly $200 million. It simply provided a great service and value to people. I believe Credit Sesame is the same way. I would note that Credit Sesame does all the right things from what I could tell (like use SSL for when you are logged in – just as your online bank would).

I also noticed a manual mode when signing up. You can enter in your data without providing your social security number. Frankly, I’m much too Lazy to deal with entering all those numbers time and again.

Credit Sesame: Conclusion

As I said at the beginning of the article, I like the service. It’s still in beta so it still has some quirks. However, its been a long time since I’ve seen a service so new have so much potential.

Like I do with many of these services, I look at how it might fit into my life. Unfortunately this is a case where Credit Sesame doesn’t help me. As a personal finance writer, my finances are more optimized than the average bear. I only carry mortgage debt, so there’s little for Credit Sesame to offer (click for larger version):

Credit Sesame: Lazy Man's Credit
Credit Sesame: Lazy Man's Credit

I think there’s a good chance that you or someone you know could save the money using Credit Sesame. Why not email some friends and spread the word?