Joe Bayen, Ceo and Founder of Lenny Loans Inc shares his remarkable story and his journey is something that every millennial and student needs to read. You will be inspired,enjoy.
Dedicated to Past, Present and Future Students
I have been fortunate enough to have experienced the full spectrum of the American dream. I was born in Cameroon, Africa, from humble beginnings and grew up in Paris, France, until my late teens. I obtained a track and field scholarship at the University of Miami, where I graduated in International Finance and marketing.
In later years , I became the CEO and founder at ICS Mobile, and thanks to the rise of the smartphone industry, I was able to turn the company from bootstrapped into a multimillion dollar mobile advertising business.
Most recently, I joined Science Inc. as an entrepreneur in residence and I am currently the CEO and founder at Lenny Inc. , a company solely focused towards building tools to improve student credit scores.
Just a Student
The following story is the tale of a student who had to navigate the US credit scoring system with limited educational resources. This is a unique but not uncommon plight, currently affecting thousands of students on a daily basis. Students that are struggling to make ends meet and often resort to using credit cards as a mean to subsist.
Education Education Education
Education has been the most common recurring theme throughout this journey. Indeed, I left cameroon at an early age with the blessing of my mother, as she sought a better education for me. I opted to run track, as it was my only viable option to obtain a scholarship and study in the United States. I was proud to graduate from the University of Miami with a 3.67 GPA, but ashamed to join the workforce with a mediocre 590 credit score. What gave?
To begin with, English was my second language, which caused me to quickly stumble out of the blocks with a 2.73 GPA, but I was fortunately able to recover and improve my grades overtime.
The US credit score system was also the equivalent of a foreign language. It similarly started out with an early stumble, but it took me 7 long years to finally heal from that self inflicted wound.
Aladdin and The Banks: Easy Access to Credit
It was the turn of the century, the Glass Steagall act had just been repealed by congress, and getting a credit card as a freshmen in college was far too easy. Banks were very aggressive and willing to offer students anything to fill up credit card application forms.
Fully loaded with a weapon of mass purchase, a $500 unsecured credit card, I proceeded to embark on a perilous credit history building path with no roadmap at hand.
A Beach Way too Far
I was looking forward to spending some time on the Miami beaches, but I quickly discovered that the campus, located in Coral Gables, was a good 16 miles away from the ocean.
The optic of spending the coming years in Miami without the freedom of enjoying the ocean would have been torture. Hence, possessing a car remained the single best option at my disposal.
Getting a Car With No Credit History
“Control yourself so others won’t have to do it for you.” — John Wooden
I had no credit history, I was young and spoke english with a strong french accent and I proceeded to enter the local ford dealership with a bright smile on my face. This was the equivalent of the three little pigs heading for a picnic in the big bad wolf’s mouth.
My monthly scholarship stipend was $975 a month and I decided to allocate $200 a month towards my car payments. A quick test drive ensued, we sat down at the negotiation table and $330 per month later, I became the proud owner of a brand new ford escort ZX2 that I could not afford.
Getting Back on my Feet
The car purchase rapidly landed me in a rough financial predicament and I had to resort to using my credit card to supplement my income. However, the price tag for using such a card, as a student with no credit history, was a daunting 19.6% interest rate. This situation lead me to progressively enter a vicious cycle of late payment fees and maxed out cards, each action contributing to further deteriorate my credit score.
The future looked bleak, but on a humid florida night came a life changing epiphany. I realized that many students residing on campus loved to indulge on fast food restaurants, but they were relatively out of reach from a walking distance. Uber did not exist, and a cab ride made no economical sense. There was a supply and a demand but no service to bridge the gap.
This is how “University 4.0 delivery service”, an ancient version of postmates or grubhub, was founded. For just $5 an order, I went on to deliver some fresh fast food to my fellow students on a daily basis. The revenue was not extravagant, but it significantly improved my finances and allowed me to finally pay my credit card late fees. However, little did I know that these late payments would remain a black mark on my credit history for the following 7 years.
Meeting Anne Michelle: The Right Way to Build a Credit Score
Following my move to Los Angeles in 2004, I struck up a friendship with Anne Michelle. At the time, she was just a few years removed from college, but somehow, she was already able to afford a brand new Volkswagen Jetta. She later confided in me that her monthly payments were just $200. I was completely stunned by her announcement and wondered how she managed to secure this deal at such a young age.
It turned out that in her youth, her mother taught her that building a credit history early, budgeting and managing her credit cards responsibly, would lead to significant savings in terms of low interest rates on large purchases.
She obviously took her advice to heart as it landed her a credit score hovering at 800 points on a 850 points scale. This is how Anne Michelle quickly became the recipient of some of the lowest interest rates the market had to offer.
“Anne Michelle’s path would have saved me roughly $6000 over a 4 year span.”
Following Anne Michelle’s path would have saved me roughly $6000 over a 4 year span. Her story made me more determined to repair my credit score and after 5 years of budgeting and sacrificing, I finally became credit card debt free.
With more knowledge, this long and unnecessary struggle could have been avoided. That experience has ever since fueled my desire to develop efficient tools to help improve student credit scores.
Today’s Credit Environment
Today, in a post 2008 financial crisis , millennials are faced with a traditional credit score system which favors credit card ownership, mortgage payments, installment payments, and so on. They are literally becoming an outcast group of our society, making it increasingly difficult for them to gain access to credit. In this environment, it would have been very challenging, for an individual like Anne Michelle, to graduate with a stellar credit score.
The following data provided by iD analytics further reinforces this reality as 33% of millennials are unbanked and 63% do not have credit cards. The most interesting part of this analysis is the fact that, as a group, millennials are outperforming other generations when it comes down to delinquency rates, which indicates that something is fundamentally broken with our system.
A New Path Forward
For the past couple of years, we have seen the emergence of the sharing economy with company such as Uber, Airbnb and more. How about developing a platform where individuals, as a group, could cooperate to help build each other’s credit scores?
Over the past year, we assembled a team, which has now grown to 17 experts, to develop such a platform. A platform that, we believe, will disrupt the way people gain access to credit, use credit, as well as build credit scores.
“Most importantly, it simultaneously helps build student credit scores.”
Our upcoming mobile application, named Lenny, rewards students with instant access to credit of up to $500 based on their GPA . The app also offers balance increases of up to $300 every semester. Most importantly, it simultaneously helps build student credit scores.
Lenny will be live in the App Store in the first quarter of 2016, early access is available at www.getlenny.com . If you know any students in need of budgeting and credit score improvement tips, our dedicated blog should serve them well.
Young millennials are currently entering the workforce with a student loan debt handicap. Our entire team is hard at work to ensure that they will not false start with a credit score handicap.
written by Joe Bayen
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