How The Credit Connection grew The Credit Connection to $1.3M revenue and 550 customers in 2023.

guys I'll do half a million bucks in Revenue this year at usecreditconnection.com when you go apply for a mortgage and they decline because some Verizon bill hits your record he'll help you get that cleaned up to make sure you are ready for your next loan that's why he calls it loan Readiness re-arctica this program this year totally bootstrapped hoping to grow a bit more next year as they look to scale hey folks my guest today is Daniel massimino he's a Serial entrepreneur with more than 13 years of expertise in the world of startups he's from Pittsburgh uh born founder and CEO today of the credit connection a groundbreaking loan Readiness platform also venture capitalist artist and thought leader Daniel ready to take us to the top let's do it all right man uh what what is a loan Readiness platform mean so essentially we work with loan professionals across the United States like loan officers Realtors um even property managers so anytime a consumer you know goes to apply for a loan or apply to be approved for a credit for credit in the case of uh say getting a um an apartment if they get declined then uh our partner Network sends them to us where then we essentially take a look at their finances and their credit report and um essentially strategize and guide them to get to a position where instead of being declined they're able to get approved within uh typically about three to four months so can we use an example here just so my audience can follow along let's say I'm trying to get a home loan from a big Bank uh BB t or truest now right or chase let's use Chase right I'm trying to get a thing from Chase Chase uses well they actually use the credit connection as the tool they use to verify people's credit history or they'll just only they'll send declines to you to help them improve their credit right so currently we don't work with like Chase itself we work with the loan officers um however yes so if if somebody was to apply for a mortgage they get declined there's a reason they got declined typically it's because of some poor uh history or accounts on their credit reports so they send them to us we do a free credit Clarity call where we go over their entire credit report with them and then we're identifying you know what are the areas that we need to work on and then on our end we go to work for the consumer to get those accounts was removed if possible to say a collection from Verizon um and if not possible then we would guide them on the best practice to take care of that account rebuild their credit so that they can get back to the closing table in three to four months and so who's paying you for this the loan officer because they want that eventual loan once they can approve that consumer or the consumer because you're helping them clean up their credit the consumer does however there are some companies that I'm aware of that do have agreements with um you know the loan officers themselves where they will cover it who are some of the like competitors in your space that do deals with loan officers directly I would say the biggest one would probably be Lexington Law um that's probably the biggest most common one however you know most of our competitors are structured as a credit repair company and what we're focused on is more so the loan Readiness because loan Readiness isn't just credit repair it's also debt to income so how can we lower debt and how can we raise income along with the credit and so now you have a holistic view of the person's finances when it comes to getting approved for lends and so if I'm a consumer wanting to prepare for a loan or I got declined and I want to improve my credit what would I pay you and what's the model monthly annually one time to help me fix my credit uh that's a great question so there's there's actually three models that we use um there's you know a monthly model so the consumer would pay anywhere from uh 99 to 299 dollars as what's called a first work fee and then they would pay anywhere from 99 to 199 a month um the second model was performance-based model so the consumer would pay a first work fee or an enrollment fee of like two 299 to 4.99 and then they're only paying for what we are able to successfully get removed from their credit report and then you have the final model which is just a flat one-time fee of anywhere from uh a thousand to two thousand dollars oh what's going on there YouTube good to see you guys now imagine this you love watching these interviews with SAS Founders but imagine if we took all of the valuation data out from over 2807 interviews I've done manually saves you a lot of time well we've done this we've built the into the beautiful interface inside of founder path check this out I'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for evaluation this year now the secret valuation is 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right let's jump back into the interview interesting and so when you look at your total revenue from last year called 100 to what percent came from each of these three buckets would you say result it was all the Performance Based um however we realized that um in order to do that successfully we we needed a much more robust accounting and billing system which we didn't have at the time so now we do um and we're able to do that model and just from my I guess my opinion I I think that the Performance Based model is the way to go and it's also more profitable and also the customer themselves likes it because they know they're only paying for what gets done yeah you know what I'm saying yep yep yeah so I guess in La last full year so 2021 how many consumers paid you to help them fix their credit uh roughly around 500. wow okay that means you're getting up there but that's I mean that's some scale so how do you for those 500 customers how do you obviously we're getting paid for performance you have to Define what good performance is so is it like a hundred bucks if you get my 200 000 mortgage approved like how do you associate the Keratin sticks there oh yeah it's a great question so basically the items on the credit report are categorized into a few different buckets so bucket one you have public records which would be like bankruptcies tax liens judgments um child support things like that um then you have another bucket which will be collection so if you don't pay your Verizon bill Verizon sends it to a collection company they put on your credit report um you have hard inquiries uh which when you apply for credit at a car dealership they're gonna run your credit and that's a hard inquiry and then you have public records and so each one of those buckets it breaks down to a specific price point so for instance for a public record something like a bankruptcy uh that would be a hundred dollars per item per Bureau so if you say had a bankruptcy on all three credit bureaus you would be paying a hundred dollars for experience to get it removed the hundred dollars for Equifax and 100 for TransUnion yep interesting so when you look at your total revenue last year what percent of Revenue was the base fee versus the performance upside the that you earned it's like 25 25 base 75 performance oh wow wow okay got it so fight what 500 times 300 is about 150 Grand of just base fee sales and then you guys actually work you know it actually it does actually work you can get people removed from these bureaus and so...