In a significant move to boost financial inclusion, the UK’s first credit builder debit card, BuildMyCreditScore, has received a hefty £200,000 grant from Innovate UK. This innovative tool is set to revolutionize the way people improve their credit scores.
What is BuildMyCreditScore?
Imagine being able to build your credit score without the fear of racking up debt or altering your spending habits. That’s precisely what BuildMyCreditScore offers. It’s a Mastercard debit card designed to help people enhance their credit scores seamlessly.
Innovate UK’s Role in Fostering Innovation
With an acceptance rate of just 8%, the Innovate UK grant is highly competitive. Out of 224 submissions, only 18, including BuildMyCreditScore, were successful. The total prize pot was £5m, with BuildMyCreditScore bagging the maximum award of £200,000.
Innovate UK is known for driving growth and productivity by supporting businesses in developing new ideas. This grant will enable BuildMyCreditScore to refine its technology, using advanced machine learning and open banking, to increase acceptance rates for those who typically struggle to access credit products.
Addressing a Widespread Need
In the UK, an estimated 20 million people are financially underserved with fair or poor credit scores. BuildMyCreditScore aims to reach out to this significant market segment, offering a practical solution for credit score improvement.
Surprisingly, 23% of Brits have been denied credit due to poor credit scores, and 43% are on the lookout for simpler ways to build their scores without falling into the debt trap.
How Does It Work?
BuildMyCreditScore operates like a regular debit card, with over 85% of UK card transactions being on debit cards. What sets it apart is its unique method of building credit. The money spent on the card is collected a few days later via Direct Debit. This method demonstrates the user’s ability to manage payments and repay credit timely, thus improving their credit score.
Successful Pilot Phase
During its pilot phase from December 2022 to June 2023, BuildMyCreditScore tested its app with 632 customers, most of whom saw an 11 to 55 point increase in their credit scores within just three months.
The Vision of BuildMyCreditScore
James Lynn, CEO and Co-Founder, highlights the mission of the card: to offer an innovative and straightforward solution for millions to build their credit scores. The traditional model, where a strong credit score is needed to access affordable credit, is due for an overhaul. With Innovate UK’s backing, BuildMyCreditScore is set to expand its reach, aiding those financially excluded and in need of better credit access.
The card is compatible with all major high street bank accounts and works alongside credit bureaus like Experian, TransUnion, and Equifax to report credit data.