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Until fintech came along, there was a serious catch-22 when it came to establishing credit. There was no easy way to establish your own credit score without first obtaining credit. This became a real problem with Gen-Z and even younger millennials who have avoided credit cards. But for most people, successfully establishing a good credit score opens doors that are otherwise unavailable. Fintech has come up with some creative solutions to help both establish a credit score or reestablish one that has dropped significantly.
My next guest on the Fintech One-on-One podcast is Julie Szudarek, the CEO of Self. She has been in this role for almost six months, taking over from founder James Garvey (listen to the episode with James here). Self was the inventor of the credit builder account and the space has grown a lot in the last few years as consumers are more aware than ever of the importance of a good credit score.
In this podcast you will learn:
- What attracted Julie to the CEO role at Self.
- How she describes Self today.
- The different types of people who are coming to Self.
- How their credit builder account works.
- What people do once they have been through their 12-month program.
- What their customers like most about Self.
- How much on average the typical Self customer increases their credit score.
- Details of their new rent and bills reporting product.
- How they approach financial literacy with their customers.
- How she responds to the criticism of credit builder products.
- Why they decided to partner with SpringFour.
- What they do to help their customers when they get into financial difficulty.
- Why they decided to sponsor the San Antonio Spurs in the NBA.
- Where is Self going in the short to medium term.
Read a transcription of our conversation below.
Peter Renton 00:01
Welcome to the Fintech One-on-One podcast. This is Peter Renton, Chairman and co-founder of Fintech Nexus. I’ve been doing this show since 2013, which makes this the longest running one-on-one interview show in all of fintech. Thank you so much for joining me on this journey.
Peter Renton 00:27
Before we get started, I want to remind you that Fintech Nexus is now a digital media company. We have sold our events business and are 100% focused on being the leading digital media company for fintech. What does this mean for you? You can now engage with one of the largest fintech communities, over 200,000 people, through a variety of digital products, webinars, in-depth white papers, podcasts, email blasts, advertising, and much more. We can create a custom program designed just for you. If you want to reach a senior fintech audience, then please contact sales at fintech nexus.com today.
Peter Renton 01:04
Today on the show, I’m delighted to welcome Julie Szudarek. She is the CEO of Self, a position she’s held since October of 2023. Now Self is a really interesting company, they are in the credit building space, they actually invented the category pretty much. We talk about their core product, how it works, who it’s for, we also talk about some of the other products that they have launched, or are launching, and how they work. She also importantly, shares the metrics of what the improvement people have seen with their credit score, on average, when using Self. She talks about the app, and I question her on the 250,000 reviews, 4.9 stars, which to me is just extremely impressive. We talk about financial literacy. She answers the critics who are critical of credit builder products. We talk about their relationship with SpringFour, and what that’s all about. We talk about what they do once people graduate from the credit building product. We also discuss the NBA and the San Antonio Spurs, and much more. It was a fascinating discussion. Hope you enjoy the show.
Julie Szudarek 01:04
Thank you very much. I’m glad to be here.
Peter Renton 01:10
Welcome to the podcast. Julie.
Peter Renton 01:40
Okay, so let’s kick it off by giving the listeners a little bit of background about yourself. Can you hit on some of the highlights of your career before Self?
Julie Szudarek 02:36
Sure. So we actually moved home from the UK in July of 2023. And right before we left, I was running an online B2C pharmacy business that covered about 75% of the addressable European market. And pharmacy in Europe is very, very different than it is in the US. There’s no Walgreens, there’s no CVS, there’s, you know, the corner pharmacist. And so being an online player was very interesting from a, just a consumer perspective, and from a regulatory perspective. And really got some, I guess you call them regulatory chops working, which, you know, come to solve, I think is has been helpful for me here. Before that, and what brought me to Europe to the UK was I was working for Groupon, which was headquartered in Chicago, and they needed someone to run the international operations. And so I went over to London to run international for Groupon, which was about a $2 billion turnover business, covering 15 different countries, and focused on growth and process standardization while I was there. And learned a ton about operating in, you know, non US employment markets and all the fun that goes along with that. And it was a great, living in Europe was a great experience, you know, for me from a career perspective, but from my family as well, in terms of the experiences that we had to have doing that. Prior, so I worked at Groupon in Chicago, which is where the headquarters were, led the local business there, drove our marketplace efforts, and really turned Groupon from a deal a day into a marketplace company. Prior to that I worked at Orbitz, which is a travel company that Expedia has since acquired, and then prior was at a couple consulting firms. And kind of knew, I don’t know how I knew this, so you can’t ask me why, but from an early age, I kind of had this goal to be a CEO. And so through my career, kind of what I’ve been heading towards.
Peter Renton 04:34
Right right. Well, and now you are. So firstly, maybe talk about when Self and how it got on your radar, and what attracted you to the CEO role at this company?
Julie Szudarek 04:47
So as mentioned, I came home from the UK, from London in July of 2023. And it was really the first time in my life that I had an opportunity to take some time and look for a job. Prior I’d kind of like job, campus recruiting, took a job and then another job would come along, and maybe I’d take Friday off and then start the new job on Monday. And it was just this, it just sort of happened. And I’m pleased with every job I’ve ever had. But in this case, I really had time to look for a job. And I had to contemplatively go and look for a job. And so one of the first things I did was I made a list of the things that I was looking for and things that were must haves and must nots, and get pretty serious about what those list of criteria were. And so talk to, I mean so much networking in this time period. One day, I got a call from a headhunter, and they said, Hey, we have this company called Self, maybe you’ve heard of it. And I said, I don’t know. And it’s, it’s a fintech. And this, this and this. And as I got to know, the company, as I went through the interview process with the board, and with James, the founder, like things on my must have list just started getting ticked. So great investors, money in the bank, proven product market fit, a caring company, and like the kind of the icing on the top of this whole thing was that this company, not only being, was not only a company that cared about, you know, profits and making returns for investors, but really, truly at the heart had a mission in trying to help humans. And it’s like, okay, this is the job for me. And so it was, you know, a fairly quick process for me to get through the interview process. And I think we just, we found, our eyes met on this opportunity. And it was, it was the perfect opportunity for me.
Peter Renton 06:30
Great. So I did interview James, a few years ago, which I’ll link to in the show notes. For those who are interested. So then, maybe let’s sort of start with talking about how do you describe Self today?
Julie Szudarek 06:44
Yeah, so at its roots, Self is a company that helps consumers with low or no credit, reestablish or establish for the first time, their credit. And credit is, I think, as most of us listening to this podcast, probably know, it’s kind of an entree to life. And if you don’t have credit, or if you have poor credit, you know, you’re just disadvantaged in life. And usually, this is happening to people that don’t need any more disadvantages in life. If you have a poor credit score, it’s more difficult to get good insurance, it’s more difficult to get a mortgage, you might not be able to, you know, you might have to have a higher deposit for your apartment that you’re trying to rent, it just goes on and on. And it’s just this death spiral down. And so James founded this company to really help people improve their outcomes through the use of access and improvement of credit and score.
Peter Renton 07:36
Okay, so then maybe talk a little bit more about who is sort of the core customer? Is it young people? Is it immigrants? People trying to rebuild credit? What’s the typical, maybe you could sort of tell us a little bit of some of the different cohorts you have?
Julie Szudarek 07:51
Yeah, so most of our customers, or a lot of our customers, I won’t say most, but a lot of our customers are in segments of the population that are just underrepresented in banks and in the banking system. And they, you know, may have mistrust of the banking system, because they’ve gone in before and tried to get a loan for something, or tried to open a bank account. And were told no, sorry, you can’t do that. Or you have to pay us to open a bank account because you don’t have enough money. So it’s, it’s people who, you know, are inherently potentially distrustful of the typical banking system that exists in this country. We do have a lot of people who have had a couple of mistakes that have led them to have, you know, negative credit scores that lead to some of the negative outcomes that I described previously. We have folks that are new to credit, so just have never had the opportunity to establish credit. The ironic thing about credit is you need credit to get credit. And so we we kind of help both those scenarios. So both the repair and the reestablishment or the establishment of credit. We have a lot of, women are in our population. Our target market, you know, is over 100 million Americans and growing because we’ve had, you know, we’ve had some really difficult years here, especially for some of the populations in this country, just with inflation and interest rates rising. So we see that pool of of people who need our help is actually growing and we’re, we’re not excited that it’s growing, but we’re excited that we have a product that we really think can help them get through tough times and improve their financial futures.
Peter Renton 09:21
So can you just talk a little bit more about the credit builder products, just explain how it works and and what’s involved in setting up a credit builder account?
Julie Szudarek 09:33
First of all, to if, if anyone listening wants to set up a credit builder account, you can go to Self dot Inc, to do that. We take you through a process and essentially, as a consumer, you provide us some information. And we, I think it’s a 12 step process. And we take you through the screens and it doesn’t take an incredibly long amount of time, and you commit to paying money into a secured CD account every single month. And once once you do that, we take the notice of that payment. And we tell the three credit bureaus that Peter has made a payment of X number of dollars, and it’s gone into this account. And we report that on your behalf every single month to the three credit bureaus. And what this does is couple things. One, you are establishing or reestablishing your credit, because we’re reporting that information to the credit bureaus. We report to three credit bureaus because as a person who might want a loan, or needs a credit check done in the future, say to do an apartment rental, you have no idea which credit bureau, you know, the person doing that on your behalf is going to use, so three is an important number for us that we that we talk to all those three. You’re learning how to save over this time period. Many people have like, never had the opportunity or thought about saving, and so we’re teaching a habit of saving. At month three, if you’ve been successful in making those payments, we offer you access to a secured credit card, which for over 30% of our population does not have a credit card, and this might be the first card they’ve ever received. And so that’s a nice benefit of this product. And then at the end of the term of the credit builder account, you as the consumer get a lump payment of all that money that you’ve saved, you know, minus the interest that we that we take out as our fees. And so it’s a pretty exciting moment for consumers at the end, it’s almost like if you remember, Publishers Clearing House used to do these commercials on TV, and they come over to someone’s house with a check. I think for some of our consumers, it’s like that. They’ve actually saved for the first time and they get a check from us or an ACH disbursement at the end of the time that they’ve saved this money, they’ve likely improved their credit with with the credit bureaus, and we hope that they’ve also developed a habit of of knowing how to save.
Peter Renton 11:49
Right, right. So then what happens then after that sort of 12 month period, I mean, obviously, you said some have the secured credit card, which I imagined they keep using, but do you have like a graduation process for those people?
Julie Szudarek 12:02
So we have recently started offering another way to build, rebuild and establish credit, which is a rent and bills product. And so that works in a similar way to what I’ve described with the credit bureau. We look for your rent and bills, payments within your bank accounts, and just through a process that we have. And then we report those payments to the credit bureaus in a similar fashion as described. And so that can be for your rent, that can be for your utility bills, so like your gas and electric. And those are also positive numbers that we can provide to the credit bureaus. In terms of additional graduation products, that’s something that we’re working very hard to continue to establish. Our customers love working with us. You know, if you go and look in the app store, we have really high customer ratings, we have great customer reviews, we have great test customer testimonials. And so we know they want to continue working with us. And we’re working hard internally to figure out what it is that makes sense for the customers that we’ve been able to graduate from the program.
Peter Renton 13:07
Right. And I did actually go on to the app store, the Apple app store and saw, you have over 250,000 reviews, 4.9 stars, that to me was pretty staggering, because it means obviously most, almost everyone’s giving you a five star rating. And I’m sure you read some of those reviews, I’m sure you did before you took the job. What do your customers like most about Self?
Julie Szudarek 13:30
I think what they like most is a that they are able to see a positive movement in their credit score. And a lot of our customers come in, and if you ask them what their goal, what their financial goals are, they’ll say they want to own a house. But they know that in order to get a mortgage and own a house, they need to have, you know, an acceptable credit score. And so I think a lot of them get very excited that they’re able to, you know, improve credit and sort of learn how to save and learn how to think about credit in a way that maybe they didn’t know how to do prior to working with us. And I think, you know, there’s a lot of mystery in credit scores, you know, even those in the industry I’d say they probably would say there’s a lot of mystery in it. But I think we demystify some of that for our customers, which I think is incredibly helpful.
Peter Renton 14:16
Right, right. So can you share some metrics. I mean, what is the typical, maybe you could even give a range of increase to customer’s credit score, and I imagine it’s going to be different if someone comes in and they’ve got a, you know, a 500 credit score and someone comes in with a 640. I mean, can you give us at least some information about how much do people’s credit scores increase?
Julie Szudarek 14:36
I’ll start by saying there’s a lot of stuff that goes into a credit score, you know, there’s where you start, as you mentioned. We only, controls not even the right word, but we only have insight into what people do on the Self platform. So you know, people can do things outside of the Self platform that could help or harm them in addition to what we’re doing, but for customers that are timely with their payments on our platform, we have seen, like, a credit score increase of around 49 points. We look at this data a lot, it’s very important data to us, because we want to make sure that we’re always helping our customers move forward. And, you know, the I think the other thing that, like I mentioned before, like this building of habit of saving is an important part of our product as well. And an important thing that, to me, indicates that our customers are evolving and learning and really creating new habits. And new habits are hard. Like, we knew that, you know, if it’s with exercise, or eating or saving, it’s a similar kind of thing that your, your mind has to go through. And saving’s probably even harder than the other two, because you’ve run, people run into mishaps when they just can’t do the saving that they were planning on doing. So really, that that habit is pretty impressive to me. Our new product that I mentioned that we launched, which is a rent reporting product, we’ve just actually finished some studies with externally, with the rent reporting product, we see about a 15 point increase in just three months. And again, it’s all the caveats I said before, people might do things outside of our platform that makes that number different, either higher or lower. But we see pretty decent results from that as well.
Peter Renton 16:17
Right. Okay. Okay, excellent. I’m interested in financial literacy, right? And it seems like you said people are getting used to this savings habit, seeing improvements in their financial lives, almost in real time. But are they learning? I mean, how do you approach financial literacy? Because it seems like a lot of your customers is the first sort of foray they’ve taken in to try and improve their financial lives.
Julie Szudarek 16:40
Right. So we have many communication touch points with our customers. So signing up for the product, you know, there’s education that occurs within that signup process. You know, obviously, the habit here we’re trying to build is this on time, monthly payment. And so we do a tremendous amount of work. And we’re always iterating on what kind of messaging should we be giving our customers about the importance of making these payments in a timely manner. And so we, you know, we send emails and different types of notifications to help remind that payment, on time payment is important. We have a series on YouTube with our, we have a certified financial planner that works with us. And she has a series on YouTube that educates consumers about credit and how to think about credit and credit building and savings. And, you know, she has a lot of really interesting things that she does there, and says there for us.
Peter Renton 17:35
If you’ve been watching some of the fintech media, there’s been some criticism of not your company specifically, but credit builder products in general, some people argue that they’re too expensive, and they’re not a reliable signal of credit behavior. How do you respond to that sort of criticism?
Julie Szudarek 17:53
Yeah, I think it’s interesting. I’m not going to talk. I won’t name competitors. But I’ll talk generally about competitors. I mean, I think, as far as I can tell, I think James and Self were one of the first players in this space. And so I think we created a category. And of course, I work here, so I think that our product is the best on the market. What’s happened is, you know, our product has been so successful that we’ve had copycats. As you see with any successful product, you always have people that come in and try to copy. And I think some of those that have come in and copied, have taken shortcuts to make the product seem easier to use for consumers. And I think that has, you know, what you’re talking about, some of the criticism that’s been out there, I think some of that has to do with some of those copycat products that are out there, because, you know, you just look at them. And as a consumer, they seem easy, but we don’t believe the efficacy of those products is as strong as our efficacy would be. And I think it’s some of those bad players that have, you know, cause some of this, this problem that you’re talking about. Again, I’m not gonna name the name people here, but you know, some Google searches could indicate some people who have had recent trouble just with the exact topic that you’re talking about. So our goal is to always be you know, consumer first, and doing the right thing by consumers such that even though our products might have a similar name to some of these that maybe aren’t as good at helping with credit, that we’re really doing right by the consumer. You know, for us that’s a super important, critical thing for us to do.
Peter Renton 19:29
I want to talk about doing right by the consumer. I want to talk about your relationship with SpringFour that, I saw that news, I think it was just a few weeks ago. And full disclosure I’m, I’ve known Rochelle, the CEO and founder there for many years, and I’m officially an advisor to SpringFour as of like two weeks ago. Maybe you could explain a bit about what you’re doing with SpringFour and why you decided to bring them on.
Julie Szudarek 19:55
Well, I have known Rochelle for a very long time, decades.
Peter Renton 19:59
Okay, longer than me.
Julie Szudarek 20:02
She’s the CEO of SpringFour. And she was actually instrumental in like, helping me through this kind of job decision. So she was one of the first people that I talked to when I started talking to Self that was external. So I share, I share your long-term, you know, relationship with her. So we work with SpringFour, we send many of our customers to SpringFour to help them with both financial literacy, and to help them find additional ways to kind of navigate the financial landscape that they live in. So we know that our, you know, we know our customers are having tough times. We recently did a survey and something like 30% of our customers were planning to start a side hustle in the coming year, like because they need more money, 30%, were already doing a side hustle, and a lot of the resources at SpringFour, you know, help people that are having financial difficulty, kind of get out of that situation. So they offer a lot of resources educationally, they offer different savings programs that might be available to consumers that consumers don’t even know exist. But if you’re in a certain, you know, income bracket, or socioeconomic class, can be helpful to you. And so we we link a lot of customers there for education. And I think we’ve passed over 3 million different customers to SpringFour since we started our relationship with them in 2019. So it’s been a great relationship. And like I said, at the core of what we do is really helping that consumer and improve their financial future. And we feel that like, SpringFour has a great capacity to do that, beyond the kinds of things that we can do here at Self.
Peter Renton 21:41
Right, and like, I think it’d be good to sort of talk about someone, when someone gets into trouble, right, they’re trying to make these monthly payments, and they are, you know, obviously there’s gonna be some people that lose their job, they get into some sort of difficulty, medical debt, or whatever it is, and they just simply won’t, can’t do it. How do you handle, I mean obviously you can you can refer them to SpringFour, but just internally, what do you do to help them?
Julie Szudarek 22:05
You know, we try to help people with telling them, you know, when they have to pay, if they don’t have to pay, our process is fully cancelable if people get into a situation where they can no longer make payments. And so we let we let people cancel, assuming they’ve already accrued funds into their secured CD account where we put the customer’s money, we would get them get that back to them as quickly as possible so they can have access to those funds. And then, you know, we keep in contact with our customers, so that we can talk to them in the future when they’re in a better financial position. And I’d say one of the things, we launched this free rent and bills reporting product in early December, and one of the reasons we did that was the economic climate had been very difficult, just a few pieces of data. In 2023, the average family had like something like $390 through $400 extra per month, in just inflation costs just from groceries and gasoline and whatever. And like $100 extra in interest payments from their car or wherever they might have interest, credit cards, etc. And if you just like, I mean $6,000 a year, that’s not like, that’s not small, especially if you’re already financially constrained. And so one of the reasons we launched our free rent and bills reporting product was because we knew people had a need to repair credit. But we also knew that maybe they couldn’t pay into a credit builder account right now. And so we saw this as a way to get them on the Self ecosystem to start helping the customers and to move forward. And just to be clear that the free service we offer is rent reporting, not rent and bills. So we have another product that’s a bills product, but that’s a for-fee product for our customers.
Peter Renton 23:55
Gotcha. I know this sort of predates your tenure here. But you know if you’re watching the NBA right now you see the Self ads are on TV, you see them, your logo on, I believe it’s the San Antonio Spurs jerseys there. So tell us a little bit about your marketing strategy, why you’ve decided to pick that particular sport and go all in?
Julie Szudarek 24:20
We sponsor the Spurs jerseys. So anyone watching an NBA game that the Spurs are in will see Self on the jersey of the players, which is really cool and exciting. This is one very visible and exciting part of our marketing mix and our marketing strategy. I think one of the reasons you know, that we chose basketball first was, it’s a high affinity category for our customers. And so we do a lot of customer surveys, and we found that our customers have an affinity to basketball. And then number two, the Spurs organization is one that I don’t know, it just sort of mirrors the values of Self. So they are, they’re an amazing organization, they’re very values based, kind of in everything that they do, it’s about the values and making sure that the human spirit is represented. And that, you know they focus on underserved communities, and they do a lot of social goodness in the world, and in San Antonio. And so it was just sort of a natural fit. I actually had the amazing opportunity this past weekend, to go to the All Star Game of the NBA, which was in Indianapolis, as a guest of the Spurs and had an opportunity to spend time with many of the executives there. And it’s just like, we’re just like minded. And so it’s a really nice fit for what Self is trying to do, and what the Spurs are trying to do. So we’re just sort of naturally together.
Peter Renton 25:48
Right, right. And they’ve got a very exciting young player on their organization right now that’s getting a lot of…
Peter Renton 25:53
Yes. Very, very tall indeed. I’d like to sort of close with looking towards the future. What’s sort of on your priority list? Where do you see Self going in the short to medium term?
Julie Szudarek 25:53
He’s very tall.
Julie Szudarek 26:09
Yeah, a couple of things. So one, we know that, you know, there’s a 100 million Americans that need, you know, that can benefit from the products that we offer. And so we’re doing, and I think that’s growing, both with the economy that we’ve just had for the past few years, and with the fact that, you know, college loan forgiveness is now over, and you’ve got people are just going to be in the need to improve their credit. And so we’re doing a lot of work on the core products. So the credit builder account, and the secured credit card to make just make them better. There’s always things you can do to make things better. We’re testing a lot with pricing, to potentially make our products more accessible to more people. And we’re doing a lot of work, just to make that product, those products as good as possible. And then we’re doing a lot to find new access points and entry points for consumers who maybe don’t want the credit builder account as their foray into Self. You know, I mentioned already the rent product that we have, that’s one, and we’re looking for additional front doors we call them, to really help our customers. And so our mission remains, helping customers improve their financial futures. But we feel that we have a good traction in this, this area already, and we’re gonna continue to build things that are great for our customers.
Peter Renton 27:29
Okay, well, we’ll have to leave it there, Julie. Best of luck to you. I mean there’s certainly, it’s important to serve this population, they need better products. And I think fintech companies like yours are providing I think something that just wasn’t. None of this stuff was available a decade ago, so keep up the good work.
Peter Renton 27:46
Thank you very much for coming on the show, Julie.
Julie Szudarek 27:48
Thanks!
Peter Renton 27:50
Well, I hope you enjoyed the show. Thank you so much for listening. Please go ahead and give the show a review on the podcast platform of your choice and go tell your friends and colleagues about it. Anyway, on that note, I will sign off. I very much appreciate you listening, and I’ll catch you next time. Bye.
