AUSTIN, Texas (12/5/07)--There are three components to effective credit score programs for youth: education, marketing and financial products, said Ben Rogers, program coordinator of the Filene Research Institute’s CU Tomorrow Initiative, at the Credit Union National Association's Your Essential Strategies (YES) Summit in Austin. CU Tomorrow works with state leagues, universities and other organizations to make credit unions more relevant-- as financial institutions and employers--to young adults. Rogers spoke about credit worthiness and how credit unions can build credit with young adults. But first, he noted that:
* Younger people have lower scores; * It takes five-to-six years of debt repayment history to build a good credit score; * Young people are more likely to earn low and sporadic wages, making them more likely to miss payments; and * The credit report market could be worth $860 million by 2010 (USA Today).
Rogers detailed the credit union response. “Education is a good start, and it's where most credit unions do start, but it needs to be coupled with marketing and tangible products to be most effective.” Rogers also discussed an example from Beehive CU in Salt Lake City that used Facebook to advertise a credit score improvement seminar. He also spoke about Filene’s I3 (ideas, innovation and implementation) project, Smart Score. The program targets a group of members, mails them their credit scores with information on improvement, and follows up with the group quarterly. Credit unions need to bring the average age of their members down, and use the opportunities they have to “reinvigorate credit unions as the first choice for their financial institution,” Rogers said.