Marketplace lender LoanNow now reports loan repayment behavior to credit tracking bureau TransUnion. The move is designed to help borrowers with limited or negative histories improve their standing, the company said.
The reporting of loan activity is part of what LoanNow terms its “repayment motivation platform”, which also includes measures to reduce loan cost over time.
“LoanNow was founded to both find and then reward the millions of people saddled with subprime credit scores with a responsible, affordable loan alternative,” LoanNow President and co-founder Miron Lulic said. “By sharing loan repayment history with TransUnion, LoanNow is helping borrowers with damaged or poor credit histories get the credit they deserve for successfully repaying a loan.”
Given that repayment history plays a key role in current credit scoring models, higher credit scores can help people obtain lower rates, which of course saves them money. That was confirmed by a TransUnion Vice President.
“Having and maintaining a positive credit history is an important first step for any consumer wanting to improve their credit scores and their financial prospects,” Robert Fallaci said.
LoanNow focuses on subprime borrowers possessing credit scores in the low 500’s (based on a range of 300-850). Its proprietary algorithm monitors and incentivizes repayment behavior in real-time. Loans of up to $5,000 are available. Nor origination fees or prepayment penalties are charged.