Zopa, UK’s leading peer-to-peer lending service, rolled out Wednesday, Oct 16, a new free credit-scoring tool designed to help simplify the credit-worthiness process and allow customers to borrow at the best possible rate.
The Al-based credit-scoring app, called Borrowing Power, works by providing customers with a borrowing score from one and ten, basing on the combined measure of credit score data, credit utilization, credit limits, hard searches, and affordability. The score will help indicate the customer’s level of attractiveness to lenders and will provide suggestions on how the user can improve his borrowing power.
Uniquely, the app is also directly linked to Zopa’s own loan products, allowing customers to check out what loan and rate they are eligible for. Better rates will also be “unlocked” as the customer’s score improves.
“Giving people certainty, transparency, and ultimately the power to lower the cost of credit in the future is unique in the market,” said Didier Baclin, Zopa’s Chief Product Officer. “With Borrowing Power, we are putting the power back into the hands of the customer – allowing people who may not be eligible for credit, or those who want a lower rate, to take action and unlock a lower rate in the future. Zopa wants to take away the smoke and mirrors linked to creditworthiness. This new tool takes us one step further towards helping people feel good about their money.”
In a report from Finextra, Zopa claimed that “[l]ending decisions and credit-worthiness have been shrouded in mystery for far too long.” In fact, in new research carried out by Opinium, 29% of Brits were shown to have trouble understanding how to improve their credit score.
The introduction of Zopa’s new credit-scoring tool is said to be the company’s effort in helping to demystify lending decisions and credit-worthiness. The tool, which is free of charge, is available on both Apple and Android and can be accessed without the need to have or apply for a Zopa product.