Interview with Maia Bittner
makes it easy to build its clients' credit history just by paying their rent. For no extra money, Pinch helps you beef up your credit score without going into debt.
Not too long ago, paying rent didn’t have much to do with your credit score. Of course, not paying rent could always (and still can) damage your credit score. But what happens when you pay your rent on time? Legally speaking, absolutely nothing. Nada. The good news? Credit bureaus and credit scoring companies are realizing that those who can pay rent on time month after month are likely to also handle credit responsibly, and things are changing in America. Studies have shown that after reporting rent, 100% of tenants who were previously unscorable had a credit score. And almost 3/4 of those studied experienced a credit score increase.
What's next for Pinch, as well as your own career?
Pinch was recently acquired by Chime, Chime is amazing. It's one of the fastest growing banking services in the United States and it has all these really cool features like no fees, getting your paycheck two days early and automating your savings take forward, it got an app, got a debit card and they're addressing financial stability in a much broader way.
We were only looking at the credit score at Pinch and so we're excited to be able to have much bigger impact and a much cooler much more sustainable business model.
For me personally, I'm starting the business operations team here at Chime and so I'm looking at that intersection between what are cool delightful features that our customers can use and how do we make sure that we're a sustainable business that's around for really long.
How has being listed in Forbes 30 Under 30 affected your career, as well as your work with Pinch?
Being in Forbes 30 Under 30 has actually been pretty fantastic for me. You know I have some friends who've done it and they said it doesn't matter has it affected their life at all, and I said OK but you've worked for Facebook and you've worked for Google so you already have that credibility.
For me I've always been attracted by really new stuff. I went to Franklin to be all in college of engineering as part of the fifth class there. It's brand new school, nobody's ever heard of it. It's not like going to Stanford or M.I.T. and then I've always been doing really early stage startups either founding my own or being one of the first 20 employees at another company, and so I love that and I wouldn't change anything about that. But in this world we really evaluate people based on someone I know vouch for them. And so when no one has ever heard of the college I've gone to the companies that have worked at least people kind of wondering who I am.
Now that I have Forbes 30 Under 30 like I had this big established reputable source that is endorsing me and it really means a lot to people you know. So I think it's a shame that this is how our system works that you need to be anointed by a credible third party. But unfortunately it is how it works, and so having that has made a big difference for me.
What are the biggest financial mistakes that younger people make regarding their credit score and financial stability?
The biggest mistake the young people make or as to their financial lives and their credit score is just thinking that their credit score doesn't matter. I've talked to a lot of people who say that you know they're like Oh I'm not interested in using a credit card or I don't want to buy a house or take out a personal loans. My credit score doesn't matter reality.
In reality, credit scores are used far beyond their original purpose and so they're used for things like pricing your car insurance for getting a better credit score will actually decrease the price of your car insurance because it's the second most important factor for pricing car insurance after your driving record it has effects on your apartment eligibility for the future when you apply to different apartments as well as even job employment eligibility and lots of other different areas and so credit scores, you know we can argue about whether they should be used for all these different purposes or not, but in fact they're used for much more than just getting your credit card, and so I think that it's important for everyone to be mindful of what their credit score is, as well as making sure that they're paying off their different liabilities.
The second most common mistake that I see people make is really being concerned about the amount of their loan. So some people will say look you know I have a bad mark on my credit report because I didn't pay this 20 dollar bill from my copay from the doctor's office and the amount of the delinquency doesn't actually matter as much as that evidence that you didn't meet that liability and that you have failed to meet something that you're about, and so I always encourage people you know like never just let a bill slide. I do talk to people to try to pay for things and that just because it's a 20 dollar bill doesn't mean it doesn't matter. It really it matters almost as much as a two thousand dollar bill that you didn't pay in terms of your credit score.
Could you please introduce Pinch and what led to your founding the company?
Pinch is an app that lets people report their rent payments to the credit bureaus so that they can build their credit score just by paying the rent.
And when we started, we didn't have this idea, we're not grand visionary founders who said you know we're going to build this no matter what, we've started, we just had a problem statement, so we knew that financial stability was a big problem in the United States, particularly for the middle class, and we wanted to see if there was a software solution that we could build that would help solve it.
And so we did a ton of customer interviews talking to people and we also dove into fintech and learned a lot of different things there, so we explored building an insurance product, and when we looked at the insurance product we said you know the financial shock that people face aren't pure risks, they actually have some impact on it. It's things like getting your car towed where we'd see people have their car towed cost five hundred dollars to get it out of the tow yard. They don't have that five hundred dollars and so they can't get their car, they can't get to work, then they really don't have five hundred and their spirals is out of control. And so what we found is that the right solution to preventing these downward spirals was really affordable credit, and we started digging into why don't people have access to affordable credit and only have access to these predatory loans. And the reason is the credit bureau scoring models were built around this lifestyle that doesn't exist anymore. It assumes that you're buying a car and buying a house in your 20s when in reality people are buying houses and cars later and less often in life.
In addition millennials pay a ton of money towards rent and they have this evidence of meeting this liability every month. Now we didn't invent rent reporting it's existed before but is only available to really large enterprise companies that have like one hundred thousand units. So our problem was just how do we do the logistical challenge to bring rent reporting to anybody who wants to sign up for it regardless of who the landlord is.