No one wants to stand in line to get approved for a loan before making a purchase car or a truck. Shoppers are generally not too keen on strangers standing near them while they do their paperwork. And they don’t like sitting in a dealership’s back office waiting for financing to get the green light so they can complete a vehicle purchase. Those are the main questions that emerged in a survey by consumer credit rating agency Experian — which thinks it has the answer.
“All of those things are going to go away with this new app,” said Alex Lintner, president of Experian’s consumer information services, while unveiling the company’s new app Credit function text in a Facebook Live video this week.
To demonstrate how Text for Credit works, Lintner walked through a dealership and approached a Ford Mustang, the year and trim of which was indistinguishable from the video. A sign on the car’s windshield said to text the word “credit” to the number 91000 on a smartphone, which Lintner did. The Text for Credit feature recognized him by his phone number and within seconds he received a message with a link to follow. Shortly thereafter, he received a loan offer for the car.
Experian, one of the top three U.S. credit reporting agencies along with TransUnion and Equifax, said this text-for-credit process is a natural extension of technological advances already being made in consumer banking (filing a check by snapping a picture on your smartphone , e.g.). These advances had left the loan application process unchanged so far.
So will consumers actually use text for loans? Experian thinks so. The company’s survey found that the top concerns consumers have when applying for credit or financing in a retail store are privacy (58 percent) and the time it takes to apply (42 percent). The survey, conducted over a week this summer, included 1,031 people aged 18 and over.
Twelve percent of consumers told Experian they abandoned a purchase because it took too long. Another 21 percent said they would consider buying a car in the next six months if they could browse loan offers and apply for financing on a mobile device. 17 percent said they would do the same for clothing, and 15 percent said they would use it to buy a large device.
Aside from the survey results, Experian now needs to get lenders and retailers on board. A company spokesman said it had “a few car companies piloting the program,” but declined to say which. Of course, a more important factor will be whether applying for credit for large mobile purchases resonates with consumers.
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