Credit Sesame is a free personal financial management tool that assists users with monetary liabilities. While other financial management tools incorporate bank accounts, retirement investments and target savings goals, Credit Sesame stays on the debt side of the transaction. It specializes in tracking and monitoring the financial obligations of each user as well as providing recommendations.

Managing Liabilities With Credit Sesame

An individual can sign up to find out his credit score for free without needing to enter credit card information. Along with pulling a credit report, Credit Sesame uses an individual user's credit score in conjunction with his financial standing to educate him on ways to save, manage credit card debt or look for financial alternatives. All a user needs to do is sign up and enter a Social Security number.

Credit Sesame actually pulls financial information from numerous sources into a single location. This allows a user to track their financial standing and make decisions based on the entire financial outlook. Users then enter and track relevant information regarding each liability. The user may also enter financial goals to allow Credit Sesame to recommend products and services based on targets that the individual has set. As of 2018, Credit Sesame assists with credit score monitoring, identity theft protection, home loans, credit cards, refinance opportunities and free credit reports.

How Credit Sesame Makes Money

Product Referral Revenue

After creating a profile and inputting their information, a user can receive financial feedback and be presented with offers. When a user completes an offer, Credit Sesame receives revenue for the referral. For example, an individual may receive a referral for a new credit card. When the user signs up for the new credit card, Credit Sesame receives a referral bonus.

Target Offerings

Credit Sesame pools personal financial information into a single location and analyzes various aspects of each user's personal finance portfolio. The products Credit Sesame recommends are not blindly offered but based on each user's current position.

For example, a user can input the type of credit card she possesses. Credit Sesame can analyze the transactions and determine if other alternative credit cards yield a better interest rate, a more rewarding points system or more favorable credit terms. Systematic algorithms analyze trends and historical behaviors to attempt to project future favorable solutions.

Targeted Advertising

Credit Sesame hosts third-party display advertisements on its website and apps from advertisers, ad networks and content providers. User information may be analyzed and utilized in behavioral advertising. Credit Sesame generates revenue by hosting this advertising on its products. In addition, because the information collected by Credit Sesame and the third-party advertiser identifies trends of each individual user, Credit Sesame is more likely to earn referral revenue as the advertisement offered will tailor to the specific user’s interests.

Loan Management and Origination

Credit Sesame manages billions of dollars in consumer debt. This debt load is tracked and analyzed to create offers to consumers. For example, Credit Sesame looks at the length of the loan, required monthly payments, outstanding interest rate and other loan factors. Then, Credit Sesame gauges the quality of the loan and potentially finds other financial institutions that provide more favorable credit terms. To date, Credit Sesame is responsible for over $2 billion of loan originations from its partners. Credit Sesame receives revenue for initiating each loan.

How Credit Sesame Is Financed

Credit Sesame has been very successful raising capital through venture capital financing. In 2010, Credit Sesame received $1.2 million in seed investment money and raised $6.15 million in its Series B round of financing. Credit Sesame has received a total of $77.5 million in funding, according to Crunchbase numbers as of October 2017.

Inventus Capital Partners and Menlo Ventures have invested in Credit Sesame during previous rounds of angel investing. Credit Sesame's operations rely on the private financing it receives.

Credit Sesame does not sell user information to retailers or advertisers. For this reason, it must capitalize on its product in other ways. By selling advertising space, earning revenue for referrals and embarking on venture capital financing, Credit Sesame is able to provide useful services to users for free.