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.
The product, called Step, is the industry’s first credit builder product where the issuer takes on risk through loans borrowed, offers members a small, no-interest loan in exchange for a fixed monthly fee, with an individual’s permission, shares information on members’ borrowing data with credit rating agencies to help people build their credit score in a low-risk way.
The product has been launched in direct response to the rise of ‘questionable’ credit builders in the UK. People are signing up and paying monthly fees to these companies believing it will improve their access to credit, but the ‘credit score’ that these companies help improve is not even one that lenders ever see. They are preying on the confusion around credit scores and are just another example of companies tricking people who are looking for support.
Neil Kadagathur, Co-Founder and CEO of Creditspring, said “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.”