Relational scoring is making credit scores obsolete

An estimated one in four American adults remain underbanked in 2022, defined as underserved by the traditional mainstream financial system while often relying on abusive alternative financial service influences as predatory payday lenders and check cashers.

For underbanked and fully-unbanked consumers, getting a responsible small dollar loan lies between hard-to-get to next-to-impossible. For those who actually possess a credit score, chances are it’s nowhere near high enough to qualify for a small dollar loan. As a consequence, those consumers often frequent one of the financially unhealthy businesses mentioned above.

Today’s underserved American consumers remain much less capable of advancing their financial health goals, only further perpetuating the all-too-prevalent cycles of poverty and debt in low-income communities across the country. In order to break these chains of financial instability and illiteracy, we must find a way to get consumers an equal opportunity to access traditional, mainstream financial services like those from their neighborhood credit union.

As we have seen for decades, without the accessible and financially healthy tools needed to achieve financial wellness, every financial action, from paying one’s monthly bills to renting an apartment, is made that much more difficult to access and achieve.


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