The credit score market is constantly evolving. New companies are finding exciting and innovative ways in which to calculate credit scores and assist those with bad credit. Want to know who is leading the way? We take a look at the credit score startups you should be keeping an eye on.
Destácame
This credit score startup is a web-based platform that is based in Santiago, Chile – enabling people to show lenders more easily that they are creditworthy.
The fundamental idea behind Destácame, is about financial inclusion. It hopes to achieve this by making credit score information completely free for all users.
The platform operates by checking a consumer’s record of making prompt bill repayments, as opposed to looking at criteria such as where they live or their level of income. It earns revenue by charging a small fee to financial institutions every time they access information. See also Open Risk Exchange.
Aire
One startup you should be looking out for is Aire. The concept of the startup, founded by Aneesh Varma, is to tackle the so-called bucketing system that is involved with credit scoring systems.
According to recent research, approximately 20 to 25 per cent of consumers who are applying for credit are marginalized by the bucketing system. This is a concept frequently used by credit score companies in order to determine a credit score.
Aire looks to simplify the system and provide a more accurate picture of the potential borrower who is applying for credit.
The tool virtually interviews people, and this changes intelligently based on the response that are given. The score is based on the interview, with the person given a score on a FICO curve, which helps more people get access to finance.
To clarify, a FICO score, developed by the Fair Isaac Corporation, is a version of your credit score that is widely used by lenders.
Credit Kudos
The aim behind this credit score startup is focused specifically on the millennial market. According to the CEO of the company, credit scoring doesn’t work for them, and the startup wants to change this.
How is Credit Kudos changing the credit score sector? It takes a one-time snapshot of the customers bank account to then calculate a more accurate credit score.
This happens when a user applies for a loan online, and a message from the startup appears on screen. When a user clicks on the message, Credit Kudos securely scans a user’s transaction history, and this information is passed on to the potential lender.
Konfio
This fintech startup is based in Mexico, and focuses on the microfinance lending market. It uses alternative credit scoring data in order to help those who are creditworthy but are typically underrepresented in current financial systems.
Konfio looks at business cash flow and a willingness to repay. These metrics are analysed by the startup through looking at nontraditional data such as e-commerce platforms, social data and their online application.
It is aimed primarily at getting small unsecured loans for small business entreprises.
RevolutionCredit
This startup is based in the United States and it enables consumers to demonstrate their creditworthiness through alternative means.
How does RevolutionCredit do this? It enables consumers to watch entertaining financial literacy videos, with the aim of helping users to both demonstrate and improve their financial capabilities.
It has helped to extend access to a wider range of financial services at better rates for more customers across the US.
This information was extracted by Payday Bad Credit, an online loans platform assisting those with poor credit histories.