The fact that millions of Americans still have difficulty obtaining loans from traditional lending sources means that achieving full financial inclusion won’t be quick or easy. With an estimated 307 million smartphone users in the U.S., mobile technology has created opportunities to expand the access to credit for low-income households, though. Charlie Youakim, CEO of Sezzle, discusses credit instability.
Consumers who would otherwise be forced to turn to payday loans and other expensive lending choices are now being helped by FinTech businesses using mobile technology to boost credit availability and accessibility. Customers may improve their credit records with the help of fintechs, which increases the services for which they are qualified.
An important area of concern for FinTechs working to advance financial inclusion is the issue of the significance of low credit ratings.
Poor credit ratings have a noticeable effect on credit availability, especially for younger customers. For instance, millennials’ average credit score was over 30 points below the national average as recently as Q2 2022, which restricted their ability to get approved for conventional lending choices. According to statistics, 36% of millennials recently rejected credit cards, compared to 25% of Americans overall.