Credit reports are a pivotal factor in determining if borrowers will be approved for a loan. But is that the best approach to analyse credit worthiness? One company challenging the status quo of the static credit report is Lantern Credit.
Lantern Credit’s Interactive Credit Report helps users evaluate “the impact of their financial actions on their credit scores and accept new credit offers.” The report is based on an interactive machine learning technology, Beam AI, which provides customized recommendations to its customers on ways to improve their credit score.
The company sells its white label product to banks and financial institutions, which displays the bank’s credit products. This enhances the customer experience and reduces adverse action reporting, which proves to be advantageous for lenders and customers. The banks are charged on the basis of actions taken by consumers on the recommendations of Lantern Credit. A non-labelled solution shows all available credit products in the credit report.
Though there are existing apps available like Kredit Karma, Lantern Credit offers flexibility while suggesting ways bank customers can improve their financial habits leading to improved credit scores.
Goal-Centric Approach to Credit Score Improvements
Lantern Credit is able to meet this need of bank customers through the use of proprietary artificial intelligence technology, called Beam AI. The company focuses on what the customer is trying to achieve in terms of funding (i.e. house, car, education, etc.) rather than on just the credit score. Since all analytics are actionable, the customer is able to act swiftly rather wait for long periods of time.
The interactive credit report provides guidance to consumers on ways to improve their credit score through actions like balance transfers and pay downs. It also offers customers available credit options. Rather than targeting consumers across the board, Lantern Credit concentrates on customers whose credit score lies between 650 and 720.
In order to enhance its machine learning engine Beam AI, Lantern Credit acquired Abstract Regression-Classification (ARC) machine learning library. This tool uses non-linear symbolic regression to generate auditable credit models by applying analytical predictions on consumer data acquired from banks. This helps manage risk and provide credit offers in a timely and actionable manner while elevating data accuracy.
Lantern Credit also appointed ARC’s inventor Michael Korn as chief data officer. Beam AI puts most of its emphasis on customer goal achievement rather than credit score alone. It helps customers access credit for large items like auto, home, and loan refinancing. Banks can also identify potential customers based on their goals.
Since Lantern Credit is not a credit reporting agency, this credit improvement model does not required adherence to FCRA regulations. Also, CFPB considers the model transparent as it provides all rules upfront to the consumer. The founder believes it is a more cost-effective tool than a financial advisor. He suggests advisors can use the tool to provide better wealth management services.
Lantern Credit History
Lantern Credit, LLC was founded in 2013 and is headquartered in Newport Beach, California. The company’s previous name was New England Funding Technologies, but was formally changed on July 20, 2017 to reflect the company’s mission (illuminate the world of consumer credit and debt) more acutely.
The company emerged with the aim to “provide customers with unique patented credit tools that enable them to reflect the impact of their actions on their credit score and manage their financial wellness.”
Lantern Credit raised $10 million in its latest round of funding, backed by three investors– John Mack, John Sculley and Kevin Knight. All three are presently board members. The funds were used by the company to accelerate the development of mPowerCredit, a patented online platform that allows consumers to enhance their credit scores in real-time.
G. Christopher Imrey, founder and executive chairman, has more than 20 years experience in technology innovation. He founded Apollo Enterprise Solutions Ltd and holds nine issued and provisional software technology patents. Chad Swensen, co-founder and CEO, has experience in developing and leading technology companies and founded wireless technology solutions provider Sweet Spot Solutions.
Lantern Credit’s board members include luminaries like John Mack, former chairman and CEO of Morgan Stanley, and John Sculley, former Apple CEO and youngest president of Pepsi-Cola Company. The company has 39 employees and expects to expand to 75-100 by the end of the year.
Lantern Credit has been able to stitch together an impressive team, board of members, and clients. Its revolutionary Interactive Credit Report uses proprietary AI to analyze and suggest actions to consumers to improve credit scores. Its ability to remain out of regulatory cross hairs is an important indicator of how big the company is expected to grow.
Written with Heena Dhir.