LONDON–Experian is reporting it has added three U.K. credit unions to its comparison services in a bid to widen access to affordable and ethical credit.
The move, which also includes community development finance institutions (CDFIs), comes after the company found that around 25% of people using its loan comparison services are not currently eligible for mainstream lenders – leaving them vulnerable to high-cost payday lenders, according to CO-OP News.
“This is the first time they have been able to find out if they are eligible to access not-for-profit lenders through a major money comparison provider,” the report added.
CO-OP News said providers signed up to the initiative include three credit unions: Manchester Credit Union, Scotwest and Scotcash. Experian, says it is in discussions to bring more lenders on board soon, worked with community finance platform Incuto to integrate the lenders, the report added.
“The financial impact of coronavirus is a worry for many of us and Experian is committed to supporting financial inclusion, especially during these challenging times,” said Managing Director of Consumer Services Clive Lawson. “That’s why we are giving our customers another option if they are ineligible for credit offers from traditional providers.
‘No Other Option’
“When a customer is unable to access mainstream credit from lenders, some feel as though they have no other option but to pursue other means such as payday loans or even illegal loan sharks,” Lawson continued. “These products often have very high interest rates and can be structured differently from mainstream offers, which can make it more difficult to calculate the cost of credit and increase the chances of customers spiraling into debt. This innovation with Incuto to offer our customers credit options from not-for-profit community lenders provides a much-needed alternative.”