By Raul Vazquez
According to the Consumer Finance Protection Bureau (CFPB), there are approximately 45 million people in the United States with little or no credit history. Many of them have low-to-moderate incomes and fluctuating wages that make it difficult for them to save for emergencies, unexpected expenses, or large purchases. Without credit history, they can be at a disadvantage when renting an apartment, securing a job (some states allow employers to check credit reports before making hiring decisions) or getting an affordable loan because so many traditional institutions rely on a credit score as a gauge of risk.
At Oportun, we believe that lacking credit history does not necessarily mean that someone is unable or unwilling to pay back a loan. There are many hardworking, responsible individuals without credit history who nonetheless deserve a responsible and affordable credit option if their car breaks down, a medical emergency arises, or if they want to pay a deposit on a new rental apartment. We also believe that they deserve the opportunity to establish the credit history they need to build a better future for themselves and for their families.
Those beliefs are captured in Oportun’s Mission and guide our efforts to make a positive difference in the lives of the people and communities we serve:
We provide affordable loans that help people with little or no credit history establish credit and build a better future.
After 5 years at Oportun, I can tell you that leading a company that has the promise to deliver on that mission at scale has been the greatest challenge and most rewarding experience of my career.
When I first arrived at Oportun in 2012, the company was called Progreso Financiero and we were focused on reaching Latino customers, an audience I knew well having grown up in a Mexican-American family in El Paso, Texas. The team was passionate about the Mission and had successfully developed and refined a proprietary risk engine capable of scoring individuals otherwise considered “unscoreable” due to their limited credit history – an incredible feat! But the company was still relatively small and we hadn’t figured out how to achieve the profitability necessary to grow and help more people.
Thanks to the focus, discipline, and hard work of thousands of dedicated Oportun employees committed to our Mission, we have achieved sustained profitability and a set of noteworthy milestones. Since our inception, we have helped more than one million customers, disbursed more than $4 billion in loans, and helped more than 450,000+ people establish credit history for the first time! Equally important, according to research commissioned by us and conducted by the Center for Financial Services Innovation, a leading authority on consumer financial health, we have saved our customers more than one billion dollars in interest and fees. (That’s how much they saved by borrowing from us instead of turning to the other credit options widely available to people with limited credit history, like payday, pawn loans, and others.)
I could not be prouder of our organization, and I am confident that we can do even more. Over the last few years, many non-Latinos have heard about our company through word of mouth and sought out our affordable and responsible loans, so we’ve already expanded our focus to help even more of the estimated 45 million people in the US with little or no credit history.
We know our efforts help our customers in their quests for a better future. Here are examples of what Oportun’s customers have shared with us:
“I used this loan to process the adoption of a little girl. She has been living with us for 2 ½ [years]. We are very proud to be parents and to be able to provide love and care to a little child.” -N.V., Los Angeles, CA
“Oportun has helped me when I needed to move into a house. I needed to pay (the) first (month), last [month], and deposit and this was the opportunity to help me with my new beginning and to also establish a better credit rating. So thanks to you and the professional staff you have.” -A.S., Delano, CA
I have received two loans from Oportun. The first helped me to buy a pickup truck, a 1988 model, and this loan was for $1,200. With the second loan, I traded my 1988 truck for a 1995 model, and also got a trailer, since apart from my job at Taco Bell, I also work collecting cardboard and selling it. Thank you for your attention. – J. L.V., Morgan Hill, CA
I hope our progress and the stories shared above will inspire entrepreneurs, innovators, and investors to take on the challenge of building profitable companies dedicated to meaningfully addressing social challenges. It isn’t easy, but it can be done and is incredibly important. And if your experience is similar to mine, you will have an opportunity to do the most fulfilling work of your career!