Student founds credit startup

When Michael Broughton was struggling to get a loan approved for his tuition at USC with no credit score, he was inspired to create Hatch Credit, a startup company to help college students build their own credit. 

In partnership with the Career Center, Student Affairs, several universities — such as California Institute of the Arts and UCLA — and a few banks, including the USC Credit Union, Hatch was able to help students improve their credit score by reporting their regular payments, such as monthly gym memberships or entertainment subscriptions, to credit bureaus.

“I realized a lot of students fall victim to [this problem], but they just don’t realize it until their senior year when they’re trying to get their first car or their first phone plan or even trying to get their own apartment,” said Broughton, a junior majoring in business administration. “They struggle and end up having to go back home, all because they don’t have a credit score.”

Samuel Acosta, one of Hatch’s first users, wanted to rent an apartment in Michigan but was unable to since he didn’t have a credit score. 

“It made me more aware of how important it is to actually start reporting credit,” Acosta said. “I was kind of lost as [to] how to actually get started. There’s not a lot of information out there for people that think ‘I don’t owe anything, so I don’t need to do anything for my credit.’”

Broughton and his team began their work by interviewing more than 2,900 students from USC, UCLA and CalArts on their knowledge of personal finance. Through this, they found that students weren’t interested in learning about personal finance but instead wished for an easy way to build credit, which inspired Broughton to help students do so through their regular payments to entertainment subscriptions, such as Netflix and Spotify. 

“Out of all the students we talked to, about 98% of them told us it was a terrible idea,” Broughton said. “They really didn’t connect to personal finance, and that’s when we learned that there’s a lot of information out there, but students just don’t care about personal finance.”

Broughton worked in collaboration with Sebastian De Vivo, a consultant for Bixel Exchange, a nonprofit organization that matches startup entrepreneurs with advisers and provides them with free, non-equity assistance. 

“From the beginning, [Broughton] had a very strong idea of what he was looking to do and how,” De Vivo said. “It was just a matter of seeing where we could step in and bring resources to help him get there.” 

De Vivo acted as a thought partner, listening to Broughton’s ideas and strategies and providing feedback to strengthen Broughton’s product. 

“People have tackled that problem [of building credit] from different directions, but Mike was the first one that I heard that targeted specifically the college student population,” De Vivo said.“The way he brought all the different threads together was also unique to Mike.”

The team went on to win its first pitch competition, TAMID Tank — USC’s version of “Shark Tank” that allows students to pitch their startups to venture capitalists — in October 2019. They moved on to win several more, including the top $25,000 prize at the Blackstone LaunchPad Propel event in New York. Hatch currently operates at a net worth of about $500,000. 

“I think [Broughton] is one of the more exceptional entrepreneurs that is still at USC,” said Blackstone LaunchPad USC project director James Bottom. “His venture at this event was one of the top four at USC, and he beat the top 100 projects from all across the globe in the Blackstone LaunchPad network.” 

Through Hatch’s mobile app, Broughton created a platform dedicated to teaching college students about personal finance through simple, easy-to-follow lessons such as how to set up a mortgage payment and how to begin paying back college loans. The app is live and operating in its developmental stage and has allowed 1,000 users onto the app from a waitlist of 16,000. Broughton hopes this number will increase to 100,000 over the summer.

“Long term, we would love to see this company exit to a bigger company in this space, like Credit Karma, NerdWallet, Mint or Intuit,” Broughton said. “It’d really be able to help hit as many students as we can.”