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UK Startup Looks to Open Banking Tech to Transform Credit Building

By Rimma Kats
October 9, 2023
in Analysts Coverage, Debit, Emerging Payments, Open Banking
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FICO Scores are Objective, Relevant, and Reliable: Why You Need Them Throughout the Credit Cycle

report credit score banking borrowing application risk form document loan business market concept - stock image

UK startup BuildMyCreditScore is leveraging open banking technology to let consumers boost their credit scores.

The company is offering consumers a Mastercard debit card that can be integrated within their current bank account, and consumers are encouraged to make purchases like they normally would. Finextra, which reported on the recent news noted:

“While the debit card works instantly like a regular bank card, the money—up to a daily cap of £30 per day—is collected via Direct Debit by BuildMyCreditScore around two working days after, allowing it to be reported to credit reference agencies. As a result, cardholders are able to build their credit score by demonstrating their ability to manage rolling outgoings and repay credit promptly.”

Boosting Credit

The primary advantage of this approach is that it empowers cardholders to strengthen their credit scores by showcasing their capacity to effectively handle continuous expense and swiftly settle any credit debts. Rather than depending on conventional credit-building offerings—which frequently entail obtaining credit and ensuring timely repayments—BuildMyCreditScore’s solution incorporates itself into an individual’s everyday spending patterns.   

According to Finextra, the company conducted a pilot program where it tested the credit building approach with 632 consumers between Dec. 2022 and June 2023. It found that most participants experienced a notable improvement in their credit scores within the first three months. In fact, score increases ranged from 11 to 55 points.

In a prepared statement, James Lynn, CEO and Co-Founder of BuildMyCreditScore, noted:

“Traditional credit builder products typically rely on someone making prompt repayments on credit they’ve taken out. If they fail to do so for any reason, they risk falling into debt and harming their credit score further. BuildMyCreditScore’s innovative use of open banking disrupts this model by integrating seamlessly with a person’s usual spending habits, allowing them to build their credit score in a safe, low-risk way through their everyday spending.”

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Tags: Consumer SpendingCredit ScoreMastercard

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