Origin Stories: Credit Bureaus

How one man's zeal to end slavery resulted in the modern credit bureau.

Lewis Tappan was a self-made twice failed businessman. By day he worked, along with his brother, Arthur, as a silk wholesaler in New York City. But his real passion was the abolition of slavery, a cause the brothers worked for tirelessly. After yet another business failure — at an age most people were dead or retired — Tappan combined his two passions to create the modern credit bureau. One of his earliest employees was Abraham Lincoln. Altogether, four anti-slavery Presidents worked for Tappan's firm.

I’ve written before about Tappan’s wild story but believe it is one of the least understood and most interesting business origin stories in existence. The impact of his work is nothing short of the modern global credit system. That would be impressive enough but he founded the business at age 53 when the life expectancy for a man was 40 years old. And he did it without letting up at all in his push to end slavery; focused on the famous Amistad case while, at the same time, starting his business (and, oh yeah, being routinely chased, harassed, and firebombed by angry mobs of pro-slavers).

Tappan turns every stereotype about formulas for success on its head. He was way too old, his repeated business failures made him a sky-high risk, he was overtly political and widely hated, his business and business model were entirely new, he was severely undercapitalized, his motivation was for a social good although he was building a for-profit enterprise, and he wasn’t singularly focused. Yet he founded a company that’s lasted 120 years and counting, Standard & Poor’s.