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Credit Builders Allance

Apr 10, 2017|

Sarah Chenvan, Deputy Director of the Credit Builders Allance, joins us for Financial Literacy Month. Sarah tells the story of how her career began, we talk about the importance of building credit, and we discuss local organizations that can help you work toward a better financial future,

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Automatically Generated Transcript (may not be 100% accurate)

910 ESPN Portland presents northwest business a weekly one hour local business wildlife. If you would like your business to be featured on north was business please call 503535035. Million point. Or email NW business said entercom.com. Now here's zeroes for northwest business Luke Anderson. They include Gibson thank you for download in the northwest business podcasts and you'll hear my conversation with the search and then the deputy director of credit builders a lot. Feel good to build or repair your credit. If you credit builders alliance dot org to find a local organization that they support this interview originally feared people eight. 2017. On 910 ESPN Portland. So thank you so much for taking time to talk to man known for assistance and you I want you start by aides telling kind of your back story. You are now with the credit builders alliance that you started your career where. I actually started my career it was so long ago and I hope that the with the International Rescue Committee so before I I moved to Portland IA worked in New York Amman is getting a graduate degree. There in public service and I worked for the International Rescue Committee which is a large relief and development organization that works all over the world. Obviously with refugees and and in other settings as well. And jittery that you traveled to Baas I know it and yet so I worked with them in New York for a couple of years graduated from grad school and then moved to Sarajevo. Spent time in Syria though from time winds from the other cities in Bosnia. Went to help them open and an office in Albania when the US started on mean our NATO started bombing Serbia. An and Cosmo and then come ended up with them in Kosovo for for a couple of years. And then Mineta came back to the United States in 2001 so shortly after 9/11 could not find a job. This comes with a surprisingly enough though I did what. Some people do when they can't find a job and went to law school. And so I don't know a lot of people who could benefit if you say you could be a good credential button if you've done that I guess that means people have done that and hopefully something or Heredia what he had a good. So I am so then AM when I graduated my school I moved up to Portland come and I AY Portland. So I was leading a billionaire it's number one and both of my sisters had lived here mom and I knew that I wanted to be closer my sisters and nom kind of start fresh and so partly seemed like a great city and indeed it is the great city and throughout turns out right exactly if you can midsummer Portland too good a good bet. So big here now for about about twelve years may tear in 2005. And in the summer. 2005 and Hurricane Katrina had just hit okay in in the Gulf Coast. And so I had with my background in national relief and development a mom went to Mercy Corps. And volunteered for a little bit to work on there Hurricane Katrina program. Down and then was hired by them too as senior program officer for the Hurricane Katrina program in the Gulf Coast based in in Portland on and did do some island traveled and spent some time in New Orleans and Mississippi. For those who don't know Mercy Corps that is an organization that does international relief but it's based here in the world. Correct so it does international relief and development work all over the world you know both in response to natural disasters and of course in response to all. War and I am and and other you know manmade disaster settings. And is based in Portland art in the has headquarters also in com in the. You were working with Mercy Corps and and now you're working with their credit builders alliance. How did that transition from the natural. Relief and aid work turn into something we're working with helping people build their credit. That's a great questions so in a lot of though the worked. That come Mercy Corps does and international rescue. Committee did an and a lot of relief and development organizations do is they'd they go in and they they deal with emergency situations but they also. Create programs or you know in investing and then and implement programs with an eye towards what yes of long term development and long term sustainability and and ways to help. Tom. You know the places where they are really that the folks reliving the places where they are really. Succeed and be successful long term and so wanna one sector that. A lot of the work. Is is focused on is micro finance you know business development generally. And certainly for entrepreneurs to for him you know. Starting a small business and growing small business is gonna be away both to get a head and to stay ahead. We talked to couple business owners on this program that have gone to Mercy Corps for classes for training. How how did those programs kind of give Bildt who's eligible for them how would someone that's interest did get involved. So come there're a lot of domestic programs specifically geared toward. Micro finance in the United States and Mercy Corps northwest is that. You know about the armor the entity. Kept affiliated with the larger Mercy Corps entity. That actually provides arms and both thin. And how organ and in Washington and possibly some other states now so so there is to my knowledge sort of moving a little more regionally now are working a little more regionally. Provides. Business development assistance to. Entrepreneurs and and does so. Using resources from many different sort of putts but one of them is what we call uncanny development financial. Institutions fund the CD if I fund which is. A program of the department of treasury that seeks to provide aid. Banks and financial institutions whether they are regulated like banks and credit unions. Or whether there are non depository institutions like. Mercy Corps northwest which is essentially a look called alone fund. Sixty it to invest funding in them capital and resources. You know ten to. Get back capital out. Until delivered to deploy that capital to entrepreneurs. In underserved communities specifically said the C if I found this is the specific mission is to help bring capital successfully to. Underserved communities are restored north west is a CD FI. So if anybody wants to get more information about Mercy Corps they can go to Mercy Corps and W dot org and that will be the arm of Mercy Corps that helps with these the community development. So flawlessly. Yeah slow down so in the area Oregon and Washington for to start both wonderful so from Mercy Corps did you transition within the organization to kind of help with the community development side of things from the relief side. And then you went to a place called innovative changes in organization that still operating in Portland. Corrects. Innovative changes. And that founding director of innovative changes which is also a CD EF Shia community development financial. Institution loan funds specifically created. And it was the brainchild of an organization called innovative housing which does have develops and and operates affordable housing across. China that Portland area. An innovative changes that offers. Responsible small dollar consumer loans. Credit building financial education and an asset building through match savings accounts. Specifically for low in come. Individuals in Portland the Portland metro area. Although it does have a statewide presence growing stay right presence. And about 70% of the folks that it serves are women and primarily women of color. And often times in a female headed households. And and so it is a CD FI. Afghans are dedicated to helping pumps are folks who would otherwise have no. No alternative no safe responsible alternative to financial products and services if it didn't exist. For anyone just joining the program are talking with Sarah Chen then she is the deputy director of the credit builders alliance a credible reliance. Is an organization that works with these community outreach programs and helps. Then connect with credit bureaus and help you know build. Better credit around the community we were just speaking about how you're the founding director of innovative changes. Innovative changes is an alternative to payday loans and you give a little more for complicated. Explanation but when it was founded that was something where people were having such a hard time getting out from underneath. Credit issues. How do you find the members to the members find uses some things that. I would imagine a lot of people don't know exists that's why they're in the crowd trouble to begin with the. Yes I think on that that's always a challenge especially for a nonprofit. Which is you know just like a for profit but a business. It just doesn't have shareholders re and it and comes that doesn't mean that. It doesn't cost money to operate in one of the things that's a challenge for a lot of nonprofits like innovative changes and others is that. It's hard to find investment arm in marketing for marketing purposes. And so a lot of the folks who come to enemy it changes come innovative changes through referrals in the community so let's say maybe they live in an affordable housing property. And the affordable housing organization owner. Operator no knows of innovative changes has a partnership with innovative changes and say they are working with their residency what's going on think it's a good idea to refer this resident. Image changes for. You know his or her situation comments that's often how kind of the first contact happens and then. Primarily word of mouth after that. Amen I think one of the things that's been that's been really interesting with innovative changes is that it now all come co have a tapes with cash or again. At Deloitte center. And so mom there's a lot of there are a lot of mutual clients they're two separate you know nonprofits in cash organ done it dead. Primary work that it does is pumped. Tax preparation for low income. Consumers individuals. And families and so but it's a great opportunity when you're coming in to get your taxes done especially if you qualify for some of that. Benefits like their tax credits I should say like the earned income tax credit which a lot of folks who come to cash organ because they're blowing common working to help. And so there's often a great opportunity there to leverage each other's services to offer a greater constellation. Of support. For those folks. When you went to use the credit builders alliance. First what was impetus to move pray and what was the transition like from innovate changes is something you started entry had. A very deep connection with the right. No I think it's a great question. I often say it really boil down to the fact that I had. I am also single mom and I had a of one and A half year old organization and no one and a half year old child when I'm I made the decision to may have overt. But a lot of really also had to do with when we went into it changes was created. We knew they wanted credit building to be we needed it needed to be an important nucleus of critical component. Of what we were offering I didn't realize how valuable how important how critical and how how much success people could have with credit building. Or how quickly and so we had joined week in des changes has joined. Credit builders alliance because of what we are making these loans we wanted to make sure that our borrowers got credit for making those on time payments and so. Credit builders alliance is the only national nonprofit that serves us in the intermediary fuels for nonprofit lenders like innovative changes and Mercy Corps northwest to be able to report their loans to the credit bureaus. So I had become very familiar with credit builders alliance and who was very very excited when an opportunity came up. Two on transition what I had from from what I have learned what I was doing locally on a larger scale nationally. What what is your role in in this process so my role in us as dumb as deputy director kind of spans both the program attic and the operational on so I do on the operational side I handle a lot of our hr com I support our finance. Manager com and kind of you know we work with that Batman team to make sure that our systems are are functioning and functioning well. Come on the program Exide I'm really I really work with primarily with our training and consulting teams so we have developed. What we call our signature credit as an asset training which we come we deployed both you know in person with her in person drinks but also virtually through webinars and online. Across the country to support our members to help their staff build their knowledge build their skills and build their capacity. To support their clients who are like the clients innovative changes and and Mercy Corps northwest. You know often struggling to build or rebuild credit good credit histories so that they can man leverage those credit histories on to their benefit. Essentially what you do with innovative changes we jury can directly with the public helping them build up their credit now with the credit builders alliance you're. Clients instead of being the individuals are these nonprofits are actually acts such as kind of on a bigger scale yet. Part of the reason that we invited you here to talk was that April is financial. Education month. Why is that so important that people were able to establish good credit or be able to repair their credit wise it's such a bonus for the community when when it. You can get people out of these low income. Typical credit situations. You know I think I think the short answer to that and there's really really long intact as well and and everything in between that are but the short answer is that come when the credit industry. Kind of really got its start you know in the you know this early sixties you know the sixties the seventies. It was the case it was a really focused primarily on new mortgage lending as the primary. Some reason that it that it needed to access to help kind of assess who's good who's a good. Risk to take out a mortgage and and other. Kind of large term maybe more asset building tight lending products. So it so for a long time it it was good enough ten knots have a bad credit history. In the last you know fifteen. Maybe twenty years certainly ten to fifteen years. It's no longer not enough not to have a bad credit history you actually have to have a good credit history to be able to really you know again get and stay ahead. Landlords look at your your credit history on car your car insurance company looks at your credit history and and in fact. We've done some research that across the country. In many cases your credit. History is bigger driver of your annual car insurance premium than your actual driving record really I had no idea. You're if you wanna get utilities turned on their cannot pull a credit report. They're gonna look at your credit histories so you may still get access to the utilities the chicken have to plunk down a big chunk of change for the security deposit if you have poor credit or give no credit. And you know having no credit is is really just as bad in the eyes of a business and or lender. As having poor credit. And so you know there's an and on and on and on to you so often employers will look at your credit history your credit report term. You refer of course for any kind of financial product that you want to be eligible for the cost of that access to that product and or that cost of that product is going to be dictated by your credit history in your credit score so. It really impacts so many facets of our life today that you can't. And if you energies or think about it like. The EU have so much money you know to spend during back. During the month come and if you can't in you know the only way to bounce the budget is either increasing comer decrease your expenses and you're gonna pay more for. Credit based expenses. If you have a poor credit history or if you have no credit histories so. If you could get a car alone for 4%. Instead of 28%. You're gonna save you know hundreds of dollars a month that's gonna do a whole lot to balance your monthly budget and help you really succeed both for you. And for your kids right if you have that if you have a family and so that's sort of exponential impact on the community is. You know is there as a result. For anyone just joining the program are talking with search and then she is the deputy director of the credit builders alliance. What advice would you give to somebody that has even if it's you know average credit made is one of improvement or somebody that has. Batter failing credits what's the first step that you should take. Third start net positive direction. So the number one factor her. Forum for bill being an establishing. For improving your credit score is going to be on making on time payments. So if you have. An existing. Credit card or loan and you have come and you have any late payments or you're at risk of heavenly pick the best thing you can do. It's get back on track with those payments and and bring them current and pay on time every time. Even if you don't have. If united are products that are that are reporting to the credit bureaus. The challenge there is that if you are late enough Amin not only will that destabilize your your your life possibly for example if it's your renting you might get evicted if you don't pay. But ultimately a lot of those that non payment goes to collections agency said the negative. Is gonna show up on your credit report as well. If you don't have any active credit which means if you have maybe you do have such and collections or may be you don't have anything at all you don't have a credit history. So you don't have a loan you don't have a credit card. Our recommendation is always to see if you can find a safe starter prospect like a credit builder alone which is a very small dollar loan. It used to be that. Yeah that was the very good advice right you said in the the last ten or fifteen years how important credit has then put it used to be oh yes you can avoid credit your bag. Profit but in those cards that cannot base and now that's not in fact that's really band you know. There is there is of course a major concern and about the risk of incurring you know out. That's a crazy amounts of death that you can't that are unsustainable and that will. Drive you to calm you know to inevitable late payments and and a tanking up your credit. Overall so there is a distinction between credit building and debt management that management is critical. Not taking out credit card terms if you can't manage the payments if you think you are at risk of you know racking up those those. Feed you know don't don't don't do it. You know the matter of credit building more financial stability. Go with financial stability but but it is not have any you have to have something that you are actively paying on an order to have a credit score. And so having that credit. Product. If it's well managed is absolutely key to onto successful credible thing. And for the people that are in that situation where they have. Bones that they can't keep up on the have payments that they just can't manage like you said is the difference between the income and their payments it's just. It doesn't balance for whatever reason. Who should they talked to the where should they reach out for help. So they should definitely go to a common organization like innovative changes because in addition to doing credit building anti offering small dollar. Consumer loans and some come in some cases to help people actually get out of other higher cost that. There are ways you know everybody's situation is is so unique. But there are ways to arm to to work with folks tend to help them both settle. Dead you know hopefully at a fraction of the cost if if possible. And or to help them you know work out a plan to manage that debt over time and it's it's a painful process and it's a slow process. But certainly organizations like innovative changes from is that is a great place to start. And the sooner you make a percent the easier it will be absolutely. Well sir thank you so much for Taylor Thomas talks may hope or listeners were able to learn something I think that I did and I really appreciate it thank you. If you like your company to be featured on northwest business called 5035350358. Or email NW business @entercom.com.