While major credit card issuers tightened lending standards and slashed credit limits amid COVID-19, some financial technology startups took a different tack.
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Startup cards can help build credit even in tough times
By MELISSA LAMBARENA of NerdWallet Associated Press April 10, 2021 6:55am Text size Copy shortlink:
While major credit card issuers tightened lending standards and slashed credit limits amid COVID-19, some financial technology startups took a different tack.
In 2020, young companies like Grow Credit, TomoCredit and Chime launched or expanded credit cards that are available to those with less-than-ideal credit because they don t run a credit check at all. Instead of relying on the traditional FICO credit scoring model, these fintech products can evaluate alternative factors like bank accounts and money management to determine eligibility.
Startup cards can help build credit even in tough times
MELISSA LAMBARENA of NerdWallet
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While major credit card issuers tightened lending standards and slashed credit limits amid COVID-19, some financial technology startups took a different tack.
In 2020, young companies like Grow Credit, TomoCredit and Chime launched or expanded credit cards that are available to those with less-than-ideal credit because they don’t run a credit check at all. Instead of relying on the traditional FICO credit scoring model, these “fintech” products can evaluate alternative factors like bank accounts and money management to determine eligibility.
What’s more, these cards don’t feature annual fees or even APRs. It’s literally not possible to carry a balance on them.
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