Creditspring, a subscription loan provider, is launching Step, a new credit builder product that helps members gradually improve their credit scores without risking additional debt.
Young borrowers will benefit from this accessible and easy-to-use solution, as a quarter (28%) of 18-34 year olds don’t know how to improve their credit score, according to a new Creditspring survey. ..
Step is the industry’s first credit builder product that takes risks through loans borrowed by issuers, offering members a small interest-free loan in exchange for a fixed monthly fee with individual permission, regarding member borrowing data. A credit rating agency that helps people build their credit scores in a low-risk way.
This product was launched in direct response to the rise of “suspicious” credit builders in the United Kingdom. People sign up for these companies and pay a monthly fee, believing that access to credit will improve, but lenders have ever seen a “credit score” that helps these companies improve. It’s something I’ve never done. They’re preying on credit score confusion and are just another example of a company that’s tricking people looking for support.
Step is designed to benefit the UK’s 10-14 million near-prime borrowers, whose credit files make it difficult to access mainstream credit products. This forces many to look at higher cost, short-term alternatives such as payday loans and guarantor loans, which often involve high interest rates and hidden fees and fees. In fact, affordable credit was the cause of one-third of all complaints about financial ombudsman services last year and was the most common problem for customers. Difficulty repayment of a loan can lead to a debt spiral, which negatively impacts an individual’s credit score and gives future borrowers even less choice the next time they need credit. increase.
Currently, there is confusion and concern about credit scores, especially among the younger generation, and one-third (33%) of individuals are concerned that the economic impact of COVID-19 is having a negative impact on their credit scores. I am. For these individuals, Step can offer interest-free loans and allow customers to create credit scores to increase their likelihood of being accepted for future credits (such as mortgages). Members pay a fixed cost of £ 5 per month, receive an initial £ 100 prepayment, followed by a £ 200 prepayment over a 12-month period, and the repayment is reported to the credit rating agency.
Neil Kadagathur, Co-Founder and CEO of Creditspring, commented: We believe that our work will be completed when our customers no longer need us, so we will make more informed financial decisions to near-prime borrowers and make long-term We want to provide you with tools to improve your overall financial health. After using steps to improve your credit profile, our goal is to make it easier for members to access mainstream, affordable credit products. ”
Creditspring announces credit builder products to support near-prime borrowers across the UK
Source link Creditspring announces credit builder products to support near-prime borrowers across the UK