TrueCredit’s KnowYourLoanRate website plays on the fear that you may pay too much interest on your mortgage.

 

 

 

 

 

The Company

TrueCredit was an OBR Best of Web winner last year when it was a division of Lehman Brothers. We were impressed with its products and marketing efforts, but somewhat perplexed by the relationship the unit had with its parent. That was solved, later in the year, when the unit was sold to privately held TransUnion, one of the three major credit bureaus in the U.S. It’s a great fit for TransUnion, and we expect the TrueCredit product line to flourish under the new ownership.

 

TrueLink 100 Cross Street, Suite 202 San Luis Obispo, CA 93401 (805) 782-8282 info@truelink.com

TrueLink, a 60-employee tech company with operations in Silicon Valley, was founded in Sept. 1995 as a mortgage-origination solutions provider. Lehman Brothers purchased a majority interest in the company on Jan. 26, 2000. The company has been selling credit report information to consumers since May 3, 1999, initially under the
1-2-3 Credit Reports brand name, now through TransUnion.com, TrueCredit.com, and CreditReports.com.  

On December 10, 2002 Chicago-based TransUnion purchased a majority stake in TrueLink. TransUnion is best known as one of the three major credit bureaus in the United States. The company, with 3,600 employees and operations in 24 countries, was founded in 1968 and purchased by the Marmon Group in 1981. The Marmon Group is the 19th largest privately held company with 35,000 employees (2001), $5.8 billion in sales (2002), and more than $300 million in earnings (2000).

TransUnion maintains a database of the credit activity of every active consumer in the United States, more than 200 million consumers. 

 

The Product

TrueCredit launched KnowYourLoanRate, its clever new way of selling credit report data, in October 2002. The service ties credit report access directly into the mortgage process with a tool that estimates mortgage rates given your credit score and debt ratios. The product is delivered through its own URL,  www.KnowYourLoanRate.com .

KnowYourLoanRate buyers receive five tools:

1.       Rate Analysis

2.       What-if tools

3.       Credit score and report (viewable for 1 month)

4.       Borrowing-power analysis

5.       Home-valuation report

 

KnowYourLoanRate is TrueLink’s fourth credit report product marketed under the TrueCredit brand. The others include: single credit reports, merged 3-bureau reports, and credit report monitoring via quarterly subscription. Credit scores and other analytics are upsold on all products (see Table 1, below).

TrueCredit delivers its products directly from its own websites and through financial institutions and other financial sites. Clients include:

§         CitiGroup’s student loan<www.studentloan.com>

§         Provident Bank <www.providentbank.com>

§         Pentagon Federal Credit Union <www.penfed.org>

 

 

Table 1

TrueCredit Product Line

features and pricing at of 5/21/03

Source: Company, 5/03

 

 

May 14, 2003 Email from TrueCredit:
As a TrueCredit customer, I first learned of the KnowYourLoanRate service when I received this HTML email, not coincidently, I suspect, shortly after the lapse of my 1-year credit monitoring subscription. The subject line read: “Mortgage preparation + online credit report for James.”

Non-customer application for KnowYourLoanRate. Existing TrueCredit customers can purchase the service by clicking through a simple order form. 

 

The main “Rate Analysis” page tells users what interest rates they should expect for six common mortgage types (30 yr, 15 yr, 5/1 ARM, 3/1 ARM, 1-yr ARM, 6-mo ARM). It also explains the basis for the prediction and allows users to edit the inputs.

Interactive what-if tools are very advanced; users may change alter the inputs by sliding a ball along a graph line to gauge its impact on estimated loan rates.

 

Competition

A similar service has been available at Fair Isaac’s MyFico.com for more than a year. It offers a free loan-rate-analysis tool; however, to use it, you need to know your credit score, which Fair Isaac sells for $12.95 and up (screenshot below).

myFico home page in late May.

Financial Institution Opportunities

At $20 per report, the fee revenue (shared with the provider) wouldn’t be large. However, the bigger opportunity is the heads-up you receive whenever someone uses the tool. More than likely they are considering some type of loan application, probably a mortgage.

Better yet, you have customers where you want them: on your site, thinking about loan options. It’s the perfect time to deliver an offer too good to refuse. It would be especially powerful if you could meet or beat the rate shown by the LoanRate tool.

On the other hand, if you can’t meet or beat the rates shown, it could be difficult to make the loan. Worse, you may have alienated an otherwise satisfied customer. Therefore, this tool is recommended only for financial institutions that consistently offer rates that meet or beat national averages.