For the first time in history, the average national credit score reached 700 last year according to FICO. On the upper end of FICO’s 300 to 850 credit score range, consumers with a score of 700 are rated as ‘very good’ credit risks. However, according to Experian, which looked at VantageScore credit score data, 21 percent of U.S. consumers had deep-subprime scores below 600. Poor and subprime credit ratings cost the consumers who carry them thousands of dollars in higher interest rates on loans and revolving credit, as well as higher premiums on auto and other insurance products.
Fortunately, it is possible to improve your credit score by making on-time payments and observing other good credit practices. Working with a company like LendUp, a direct online lender, can make the rebuilding process easier. RewardExpert spoke with Georgia Gonder, LendUp’s content and communications manager, about the lender’s products and how they can help you take steps towards a brighter financial future.
Everyone Deserves Access to Quality Credit
LendUp believes everyone deserves access to quality credit and is on a mission to provide all consumers with a path to better financial health.
The company’s cofounder and CEO, Sasha Orloff, developed a deep understanding of the lack of financial service options for people with subprime credit scores while working for The World Bank and Citigroup. Together with his step-brother, Jake Rosenberg, he set out to build a technology-enabled financial service that could serve the millions of Americans that banks and the traditional credit industry had turned their backs on.
They founded LendUp in 2012, and the company has since “issued hundreds of thousands of credit cards and originated more than $1 billion in loans,” Gonder explained. “In total, LendUp has saved customers more than $180 million in fees and interest, improved credit scores by estimated hundreds of thousands of points, and provided more than 1.7 million free online education courses.”
Credit Cards for Less-Than-Perfect Credit
LendUp’s flagship financial product is its Visa-branded credit card, offered in partnership with accredited banks. Gondor said the lender’s credit card business has increased substantially in the last year and has long surpassed LendUp’s short-term loan product in terms of new customer acquisitions.
With clear terms, affordable payments, and an online application process offering an instant credit decision, a LendUp credit card is a viable option for someone with a less-than-perfect credit score or no credit history at all. The card does not require a security deposit and there are no over-limit fees, either. Payments are reported to all three credit bureaus, enabling consumers to rebuild or establish a credit history quickly.
“We believe we’ve created the first credit card with a conscience,” Gonder said. “Studies show that, on average, having a low credit score will cost people $200,000 over the course of their lifetime. So, we set out to build cards for consumers with subprime credit scores, and we work hard to ensure they feature clear pricing and transparent terms.”
LendUp technology provides its cardholders with never-before-seen features in the subprime market as well. “For example, we offer flexible payment dates that allow customers to choose their pay date and shift it by a few days when they need to work around other expenses,” Gonder added. “We also offer customized notifications and a mobile-first experience that is tailored to our customers’ specific needs.”
Short-Term Loans Also Save Customers Money
LendUp offers short-term loans as well and allows repeat borrowers to earn access to apply for larger loans at lower interest rates over time. “In states where we offer installment loans, borrowers can even earn access to apply for credit-reporting loans,” Gonder said. “We’re saving our customers real money—more than $182 million so far.”
The short-term loan application is easy to complete online and, like the credit card product, offers an instant decision. Good credit is not required for short-term loan approval.
“Being a financial services company that puts customers first sets LendUp apart,” Gonder said. “What consumers have generally seen as transaction-style, headache-filled experiences at predatory lenders, LendUp is transforming into a positive experience and a relationship. With the goal of improving financial health, LendUp is putting customers in the driver’s seat with their finances.”