The United States is facing a credit crisis. With 132 million Americans having a credit score low enough to be beneath the cutoff for most credit card issuers, nearly half of the country is locked out of the resources they need to build up their credit and achieve essential products and services for their lifestyle.
Lamine Zarrad, previously the National Bank Examiner for the U.S. Treasury Department, hopes to change that. With the new fintech platform launched by StellarFi, the company he leads as Founder and Chief Executive Officer, Zarrad plans to help consumers build their credit just by paying their bills on time.
“The traditional credit card approach to credit-building is very inefficient,” said Zarrad in an interview. “If you don’t have a co-signer, you’re likely to get a credit card with a very low credit limit and a high interest rate.” Meanwhile, getting a secured loan is “inefficient, and unfortunately, it’s also expensive.”
StellarFi’s new platform negotiates a unique relationship between buyers and creditors. The company advances cash to customers, and that money is used to pay bills, with the payment being reported to major credit bureaus Experian, Equifax, and TransUnion.