How Technology can help your Credit Rating
It can be quite common for people to fall behind on payments such as credit cards or loans and end up with bad credit.
For some people though, bad credit is just a temporary blip and they fully intend to keep on top of things moving forward. Getting out of bad credit just got a tad easier though thanks to new technologies that help people find the right financial product for them that can help them improve their credit score, without them contacting a very bad credit loan direct lender.
Credit builders
There are several service products that allow for the monitoring and tracking of your credit and its fluctuations. Among these are:
- Experian
- Noodle
- Check My File
These services are usually free and you can see your credit score and what is affecting it negatively. These products will also provide suggestions on how you can improve your credit rating, such as closing accounts and paying off outstanding debts.
Eligibility calculators
Several comparison websites and credit providers, to accommodate people that have bad credit, have begun to offer what are known as “eligibility checkers” on their websites. These checkers allow people to enter their details as though they were really applying for credit or a loan, and they will be presented with a list of providers that might accept them.
These eligibility checkers are being used by comparison sites such as All The Lenders, Money Saving Expert and Totally Money.
Eligibility checkers are free from obligation – you don’t have to select a provider – and they only perform what is called a “soft credit search”. This means there will be no impact on a user’s credit score and will not affect their ability to get credit anywhere else.
Blockchain
Blockchain is still in its infancy but it has still attracted a lot of investment from venture capitalists and international banks. A lot of customers with poor credit have had opportunities made available to them through the use of distributed ledgers and decentralised banks.
An article on Medium explains that the use of bank statements and payslips can become increasingly unimportant when it comes to loan approval. Smart contracts have given rise to lenders being able to validate transactions, and verify the authenticity of counterparts, much more efficiently. This advancement could help people that have had their applications rejected using more traditional means.
Canopy
Canopy is a new app on the market that allows tenants to build up or repair their credit rating by paying their rent on time. Canopy connects landlords, tenants and credit reference agencies and it follows the idea that people that pay their rent on time, consistently, can be recognised, acknowledged and have their credit rating increased.
Some people may never own their home or they may be kept from using certain financial products because they rent, but this tool can help them build their credit rating even if they have had bad credit in the past.
SALT Lending
SALT is a new concept and it offers a way for people with either good or bad credit to borrow, using their cryptocurrency as collateral. Your crypto assets are taken hold of by SALT and released once the loan, and interest has been repaid.
This financial tech. company is essentially hoping that the currency increases in value, helping them to maximise their return. If the value goes down significantly, they notify the borrower.
SALT type lending is not regulated and is totally decentralised from the banking system. For anyone with a particularly bad credit history, with crypto assets, this provides a unique way of borrowing.
