Fintech & Ecommerce

Experian to Pilot Credit-Building Service

Experian will pilot a new service for “credit invisibles”– people with little to no credit history – to get better access to mainstream financial services and start their credit-building journey

Experian to Pilot Credit-Building Service

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The global information services company Experian, which provides numerous credit-related solutions, has announced its intention to launch a new credit-building service for traditionally underserved categories of customers.

The announcement was released as part of the annual Credit Awareness Week 2023 campaign, held in partnership with the financial services publication Credit Strategy. The initiative aims to boost financial inclusion and encourage more people to engage with their credit history and personal finances.

The new service is specifically designed to serve the so-called ‘credit invisibles’ who have little to no credit history. Those include representatives of low-income households, recent immigrants, ‘new-to-credit’ young people and the older generations who have long paid off their mortgages or have not previously relied on credit.

Selected providers chosen for the pilot will help ‘credit invisibles’ establish and develop their credit files, using transactional data accessed via open banking.

The trial period will start this summer, allowing the company to test the customer journey and validate the approach before launching the service to a wider audience.

The issue of lacking relevant financial information to access mainstream credit products affects about 4-5 million credit invisibles living in the UK today. Without previous credits on their profile, customers are often considered high-risk borrowers.

Thus, they face so-called ‘poverty premiums’ paid for access to financial services. These include extra costs to access essential services, such as energy and financial services. According to Fair by Design, the poverty premium affects 14 million households in the UK, costing £4.5 million per year.

To alleviate the burden for the borrowers, last year BNPL provider Klarna agreed to report UK consumer purchase data to both Experian and TransUnion.

Many fintechs are trying to tackle the same problem. Thus, Zolve Credit Card is a credit product specifically designed for Indian students and working professionals residing in the US to help them make a credit history at their new place of living without extra “premiums”.

Nina Bobro

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Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.