Credit Matters: The Enabling Power of Credit Education — An Executive Perspective

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The Chief Financial Officer (CFO) of a company has the daunting task of managing, in essence, all fiscal decisions that are needed to ensure their company runs smoothly and effectively. They must understand the market they are a part of and handle the risk analysis to determine monetary next steps the company should
be taking.

For nearly 4 years, Jon Pexton has been the man to take on the role of being Progrexion’s CFO. He described his position as “Trying to understand what makes the business operate, making sure we are investing the right amount of money in the right areas to deliver a great experience for our customers, a great experience for our employees, and a return for our shareholders.” As CFO, through the nature of his position, Jon has to make difficult decisions. He expressed that these decisions don’t just affect him, they affect the entire company. “We have close to two thousand employees at Progrexion and the decisions that not only myself, but the executive team make in general are and can be impactful to a lot of people. We spend a lot of time trying to make the right business decisions.”

With 20 years of experience, Jon has been able to identify his ideal place to work and what characteristics make it that ideal place. Progrexion fits his ideal. “I like fast-growing companies [where you have] enough complexity and challenge to the job, yet it is still manageable. Unlike in a multi-billion dollar organization where you just get lost, we [at Progrexion] get to see the whole picture. We really feel like we can have an impact on the business, but yet we’re big enough to where, you know, we have a lot of complexity and challenges and I think that is a fun size of company to be in.”

It is not just the challenge and complexity of the job that Jon likes, he said, “When we get to hear the customer testimonials, and see the impact of our services on customers, it really makes you proud to be a part of such a great company and organization.”

Breaking it Down with Jon Pexton

Credit: The Enabler

“When I hear the word credit, I think of an enabler. Credit can be an enabler – a tool – and I also think the word responsibility comes to mind.”

“I recently was attending graduation ceremonies up at the university, and seeing all of these students come across the stage and get their diploma, it’s exciting to see that they are just on the verge of taking on these new professional lives. They’ve become skilled and specialized in something, and you think, many of those people relied on student loans to get through that process, but they are off on the great new adventure in their life and credit was an enabler. Without credit a lot of those people may not have been able to afford college and they’ll be able to pay it back. I think that’s a great example of credit enabling people to improve their lives, to improve society.”

“Credit does affect your quality of life. At times in life you are going to need to borrow money to get the pump started if you will, or to prime the pump. That initial funding can enable you to get a college education, get a car, get transportation, get a house, and that’s going to impact your quality of life and then give you the opportunity and empower you to get hopefully great employment and continue to improve your life and your quality of life.”

Credit in One Word: Responsibility

“I also think that responsibility – as a finance person, trying to run a company profitably, but also invest for the future and take care of the different constituencies – there is a lot of responsibility when you are dealing with financial matters and likewise with personal financial matters and personal credit, you need to be prudent and thoughtful about how you use credit.”

“There are a lot of people who think about department stores, for example, that will give you a credit card hoping that you will buy more product from them – maybe nice clothes that you might not be able to afford or that you shouldn’t buy on credit. The availability of credit, just because it is available, doesn’t mean that you should go down that road and use it.”

Credit: Lack Of Education in Our Society

“Does the lack of credit education affect our company? Yeah, I think absolutely.”

“The customers we are helping have credit issues. They have low credit scores and the reason behind that is sometimes it’s just a complex unfair system that we are trying to help people understand and be the professional advisor to those people, and educate those people and give them awareness as to what the situation is.”

Diagram 1“It’s a very complex world out there, particularly in the personal credit space. When people hear about the word FICO score, I don’t know if this is something they appreciate, but there are potentially more than 20 different scores that will have an impact, dependent upon what type of credit you are looking for or a job. You have other scores that are put out by the credit bureaus and how are those scores even put together? It is kind of a secret sauce, a black box, that a lot of people don’t understand. I think a part of what our company does is provide education to people, to take their specific situation and advise them on what’s the best path to ensure that they have a fair and accurate credit report. Beyond that we’ll help them with education and credit monitoring to ensure that they can maintain a fair and accurate credit report.”

Credit: Let’s Get Personal About Credit Education

“I can’t think of credit education that was offered in either college or high school when I was growing up.”

“You have to take personal responsibility to understand ‘how am I going to use credit in my life to enable my life to do better things and how am I going to refrain from some of these maybe easy offers and not go down that path.’ That requires thoughtfulness and education, and people would probably benefit from some good awareness in the high school level and/or college.”

“It’s interesting, my daughter is in middle school right now, she is going into high school and she was able to sign up for a jewelry making class. She hasn’t signed up for a personal financial class, and it may exist, I just haven’t heard that she signed up for that, but you’d think that would almost be a required class for people now-a-days so that they don’t get into trouble and so they understand the benefits and the risks associated with credit.”

“As a kid, I had a credit card pretty young. I would say right around when I was 16. That was when I had a car, I had auto insurance, paying for gas, and that’s when I got my first job and paychecks started coming. That’s really when I asked questions and my parents offered a lot of advice. My parents let me use [my credit card] and that was when they really hit it as to when and how this type of thing should be used and should be used correctly. It facilitates an easy life and an easy transaction, but I was always told to pay my bill off each month and never get ahead of it. You’re now trying to become a responsible adult and these are some things that you should be aware of and I think that is where it started for me.”Diagram 2

“In the public school system, it should be a required component. Again, they offer classes in technical trades, woodshop, and cooking classes. I don’t know why we would think that understanding how a credit card works and credit in general would not be a really important life skill to have.”

“When you use credit, credit comes with an interest rate. You need to think about and appreciate what that interest rate means. When you go and say, ‘I’m going to buy this pair of pants and I’m going to buy them on credit with a credit card,’ those pants are not only going to cost you that, but its potentially a 20% or more interest rate on top of that. Not really understanding the true cost of what you’re buying, and if you can afford it now, can quickly get you into trouble.”

Closing Thoughts

“Credit matters because again I think it’s a tool, it’s an enabler, and it can really help people improve their lives if it is used the right way. Credit matters because in today’s society, when we look at hiring somebody, when you look at trying to get your insurance rates, when you look at renting an apartment, when you look at trying to get a cell phone at times, [and when you look at] interest rates that you are paying on loans, all of those things people are going to understand what kind of credit risk are you and do we want to do business with you. Having a good credit score, having a fair and accurate credit report, will help people make the right decision about doing business with you and that is why credit matters.”

*All survey and other statistical data courtesy of Survey Monkey’s “Credit Matters: Credit Education” survey results

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Accounting Spotlight

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How does your team interact with the marketing department?

Recently, Accounting supported the Marketing team in ensuring proper accounting treatment for a very significant contract and ongoing relationship with Adobe.

The Accounting team is currently supporting Marketing through efforts to implement an enterprise grade incentive compensation software tool; this will enable Marketing to have better analytics, modeling capabilities, and other flexibilities that don’t exist in the current environment.

How does the accounting team support the company?

Our team supports the Company by ensuring timely and accurate transaction processing, accounting and consolidation of financial results. We deal with specialized finance related to significant or complex corporate transactions. The Accounting team also insures compliance when reporting on financial results to parties outside of our organization.

In what ways does your job impact the credit space?

The Accounting team is directly responsible for ensuring that a credit repair customer is billed accurately and in accordance with agreed upon terms.

What was the most memorable project you contributed to for Progrexion in the past 6 months?

The Accounting team recently implemented back up payment processor relationships to diversify risk. Another very impactful contribution from both Accounting & Finance teams has been the improved periodic reporting and analytics on financial results and operational performance. This enables business leaders to better understand their respective functions in our organization.

List 3-5 words that can explain your department?

Reliable & diligent team players

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Industry Impact

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One of the critical factors in Progrexion’s innovation is participating in industry events, conferences, and trainings nationwide. The Progrexion team creates a competitive advantage by staying up to speed with the latest technologies and methodologies available, and then driving tests and initiatives to leverage new approaches back at the office. Read More

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