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As we recover from the pandemic, millions in the UK need financial breathing space

Even before Covid-19, Experian found that 40% of adults in the UK wouldn’t be able to pay their rent or mortgage if payments rose by more than £50 a month.

By October 2020, 20 million said their financial situation was worse than before lockdown. An extra 3.7 million people were showing signs of financial vulnerability.

For these people, affordable, ethical and easy-to-access short-term credit is vital. It means they can rest easier, knowing that the solution to today’s difficulty will not become tomorrow’s unmanageable financial burden.

Why Credit Unions are a big part of the answer

Among the key providers of that kind of credit are Credit Unions. These not-for-profit, community lenders, provide the financially underserved with the kind of ethical and affordable short-term loans that can be the difference between a home and eviction.

They also offer excellent savings accounts, even for those putting only a little away each month. And they give reliable, honest advice.

Credit Unions are a trusted friend for the financially vulnerable. So too are Community Development Financial Institutions (CDFIs), which offer similar services. But many of them don’t have the digital pathways that would allow them to reach many more who need their help.

That has led to many turning to payday lenders, who charge far more.

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Growing Credit Unions’ audience through price-comparison sites

Now that is changing. With a simple new platform, Experian is giving Credit Unions a ready-made digital pathway to reach financially vulnerable customers online.

Crucially, that means their products can, for the first time, feature on price-comparison sites. Used by an estimated 85% of those with an internet connection, these sites can give Credit Union products the spotlight they deserve.

How the new platform helps

The first key benefit is our pre-qualification stage. By entering details of their circumstances and needs on the comparison site, customers are soft-checked to find loans that suit them.

For customers, that means they can check eligibility without damaging their credit record by making multiple applications.

For Credit Unions, it slashes the costs that come with handling enquiries from those who don’t clearly match their financial or geographical criteria.

For comparison sites, it broadens their appeal to the quarter of users for whom mainstream products don’t fit, enhancing their brand.

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Putting the financially vulnerable in touch with Credit Unions

Using technology from our partners incuto, Credit Unions can now automate and digitise the loan application process, in some cases getting set up digitally in a single day.

Experian has also built in its Open Banking and affordability services into the customer’s digital journey. So Credit Unions can get a rich, real-time overview of affordability.

All of this means that Credit Unions can go digital fast, easily, and cost-effectively, giving customers who need help a seamless digital journey.

From a comparison site, consumers can arrange an ethical, affordable loan in minutes – giving them the breathing space that in difficult times so many need.