Subscription loan provider Creditspring launches credit builder product

Subscription loan provider, Creditspring, has launched a new credit builder product that helps members gradually improve their credit score without running the risk of incurring further debt.

After Creditspring research found that over a quarter (28%) of 18 to 34-year-olds are unaware of how to improve a credit score, the firm suggested that its new solution, Step, could help younger borrowers to improve their scores.

Step, the industry’s first credit builder product where the issuer takes on risk through loans borrowed, will offer members a small, no-interest loan in exchange for a fixed monthly fee. With an individual’s permission, it shares information on members’ borrowing data with credit rating agencies, to help people build their credit score in a low-risk way.

Creditspring said it has launched the product in direct response to a rise of “questionable” credit builders in the UK. The subscription loan provider has designed the tool to benefit the UK’s 10 to 14 million near-prime borrowers whose credit files make it harder for them to access mainstream credit products.

At present, Creditspring suggested there is confusion and worry around credit scores, particularly among younger generations, after its research found that a third (33%) of individuals are concerned that the financial impact of COVID-19 has negatively affected their credit score.

Creditspring co-founder and CEO, Neil Kadagathur, commented: “Step offers our members an accessible and affordable method of building their credit profile, with no hidden charges to contend with.

“We want to empower near-prime borrowers with the tools to make more informed financial decisions that contribute to better overall financial health in the long term because we think our job is done when our customers don’t need us anymore.

“It’s our goal to help our members get better access to mainstream, affordable credit products after using Step to improve their credit profile.”

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