NEWPORT, Ky. — Brittany Dumas was a young mom with a steady job and big dreams when she approached Newport-based Brighton Center back in 2012.
She had heard about the nonprofit organization's Credit $mart program and figured it could be just what she needed to clean up her credit and get her financial life back on track.
"I knew I wanted to buy a house in the near future. My son was 2 at the time," said Dumas, who is now 27. "We lived in an apartment building, and I remember having neighbors that would complain my son was making too much noise. I wanted to have my own house where nobody could tell me how loud my son could be."
Brighton Center created Credit $mart to help individuals and families learn better money-management skills, improve or establish credit and build assets. Participants in the program attend Brighton Center's two-hour "Two Cents about Finance" financial education workshop. After that, Brighton Center can help them get loans for up to $1,500. Participants must meet with a Brighton Center financial counselor once a month until the loans are repaid, which takes up to 18 months.
Credit $mart has helped scores of people. Between 2013 and 2015, the program had 68 loans approved, said Stephanie Stiene, Brighton Center's financial services director.
Brighton Center stopped the program temporarily after an out-of-town financial institution acquired the local bank that had been making the loans.
But now Credit $mart is back — thanks to a new partnership with Stock Yards Bank & Trust Company.
"We know these are folks who truly are trying to find their way out of a bad situation," said Mary Beth Whittaker, Stock Yards Bank & Trust's compliance officer. "We felt very confident that it was going to be a good result."
Avoiding Payday Lending
The kind of loans that Stock Yards Bank & Trust Company will make through the Credit $mart program are, by definition, riskier than traditional bank loans. The bank will loan the money directly to the customers, Whittaker said, although it can assist if a customer wants to use the money to pay down other debt.
Instead looking at a potential customer's credit score or mortgage or car loan payments, the bank will use what Whittaker termed "softened" underwriting criteria.
For example, the bank will look at whether the loan applicant has a steady job, is current on his or her rent payments and pays his or her utilities bills on time.
Whittaker said the bank is confident that having that information — along with the fact that applicants will take the "Two Cents About Finance" course and will have continued support from Brighton Center — will result in making loans that will be repaid.
"Even though we know this person may have had some bumps in the road, we also know they have participated in this financial literacy programs and Brighton Center is working to maintain a relationship with these folks," she said.
And the program gives Stock Yards Bank & Trust the opportunity to find new customers in Northern Kentucky, where the Louisville-based bank opened branches in Florence and Highland Heights last year.
"For us, it was a great way to be present in this new community where we have branches," she said. "From a community service perspective, we want to make sure as many people are as bankable as possible."
For the people who have taken part in Credit $mart in the past, the program has offered a financial lifeline they couldn't get elsewhere, Stiene said.
"They couldn't go into a regular financial institution and get an unsecured loan," she said. "At the same time, with the payday lending situation, you're talking about a potential 390 percent interest rate with not paying that loan back in a timely basis."
Stock Yards Bank & Trust will offer Credit $mart customers an interest rate of 12 percent, Whittaker said. The loan terms will be a minimum of six months or a maximum of 18 months, she said.
The bank has agreed to make 62 loans as part of the program, Stiene said.
College, Home Ownership and More
For Dumas, the program made a huge difference.
Back in 2012, she had credit card debt that was delinquent along with student loans and medical bills that she wanted to pay off. Credit $mart was such a big help with all of it that Dumas was able to buy a house in Covedale in January 2015.
"That program definitely did help a lot," said Dumas, who has worked for Fifth Third Bank at its Madisonville operations center since she was 19.
The $1,500 loan that Dumas received didn't eliminate all her debts, she said. But Brighton Center also helped her work out some settlements and gave her tips about how to get things removed from her credit report.
The program also nudged Dumas to start a savings account.
"I didn't ever used to be concerned with having a savings account," she said. "I realized that savings is good. When unexpected things come up, it's good to have a back up."
Even all these years after graduating from Credit $mart, Dumas still has money from each paycheck deposited into the savings account she started through the program.
And she's more mindful than ever about the importance of maintaining good credit.
"I know I don't quite have all the money that I need to buy things outright, so I know credit is important," she said. "I know I'll need a roof in a few years out. And that's something that I definitely try to keep in mind."
Dumas is making her other dreams come true, too.
She graduated from Thomas More College this past May with a bachelor's degree in business administration and a concentration in management. And she's engaged to be married in September to the father of her son, who is now 6, and her 2-year-old daughter.
Credit $mart isn't responsible for all of that, of course. But Dumas said the program sure helped.
"It's a lot of great knowledge," she said. "Not just because of the loan. It just kind of shifts your mindset."
Lucy May writes about the people, places and issues that define our region – to celebrate what makes the Tri-State great and also shine a spotlight on issues we need to address. Childhood poverty is an important focus for her and for WCPO. To read more stories about childhood poverty, to go www.wcpo.com/poverty .