October 28, 2022
Get Smart About Credit with SoLo
About 45 million people in the U.S. are “credit invisible” because they have little to no credit history, according to the CFPB. These are often people who have jobs and pay their bills on time, but the current system unfairly keeps them from having access to loans. There’s no sensible reason for millions of people to be locked out of the financial system because they face a tougher road.
SoLo advocates for fresh thinking about how to make access to money fairer for all, so on National Get Smart About Credit Day, we want to think about how the lending community can make credit make more sense–for everyone.
Here’s how we can do it together.
Open up new resources – A 2021 study found that banks use algorithms that are less favorable to non-white, non-wealthy people. The system isn’t fair by design, so we need to create a new one. SoLo provides a solution for now, but we want to see more resources. With SoLo Pro, we’re enabling more companies to build financial products that help more people in more places.
Rethink creditworthiness – For the nearly 20% of Americans with subprime credit scores, credit is hard to get. We believe the SoLo Score is a more accurate predictor of who will pay back short term loans. We’re working on a way to make more behaviors positively impact traditional credit scores, which can be vital for accessing housing or purchasing a vehicle, and we call on others in the industry to set new policies that help rather than harm credit scores. It’s time that reporting bureaus factor in payment histories with alternative sources, which will boost a user’s credit score.
Be the bank – Have you ever heard the phrase “Be the change you want to see in the world”? That’s what we want–for the community to band together and increase access to people locked out by gatekeepers. Our belief is that community is the best way forward, so we’re building a SoLo DAO lending co-op that will share the risk of lending, and the rewards, which we believe will revolutionize the way people access money on the SoLo platform.
Get smart (er) – Did you know that payment history and amounts owed can account for nearly 60% of your credit score? We have a financial literacy page to help you take control of your finances so you can master these and other financial markers. Learn more about credit, budgeting, and other personal finance must-haves.