As a financial institution, you occasionally deal with customers who don’t have an existing credit score. Teenagers and young adults seeking their first real bank accounts, professionals opening their first bank account with years of savings, or immigrants whose international credit histories are not accessible. In these situations, financial institutions do their best to assess each person but the best path is to help your customers to rapidly build a legitimate new credit score.
For most unbanked populations, the easiest way to do this is to integrate credit into routines that are already part of daily life. Through the right low-limit credit reward programs and information about each card, you can help underbanked populations quickly bootstrap themselves into strong legitimate credit scores that reflect their responsible ways of life. Let’s take a look at four of the best mobile banking rewards programs you can implement to build credit scores quickly.
The Grocery Card
Those who understand credit cards often use credit to pay for weekly groceries. Then, when pay arrives at the end of the month, it’s easy to simply pay the entire amount for the month’s groceries. A card that offers rewards at local grocery stores and for quick repayment also quickly trains new credit-holders on the right way to treat credit. As families get used to having a grocery card that earns rewards for repaying the low-limit credit, they will also build a credit score from constantly repaying the card.
The Gas Rewards Card
Gas cards are something that underbanked populations are often aware of, at least in principle. One smooth way to make the transition from prepaid cards to traditional credit is to craft a gas rewards program for your underbanked population with an option for rigid limits that cut off in the same way a prepaid gas card might. There are many types of card that are designed to help card-holders not go over the limit, and this will ensure that gas credit cards never become overcharged and unpayable. Instead, gas card holders can get rewards for commuting or working as a driver without worrying that costs will exceed their income.
For every person and family, there is something they choose to splurge on. For some people, it’s eating at restaurants. For others, it’s gym memberships. For others, it’s pampering a pet. Like groceries and gas, you can count on people to integrate these favourite things into their lives and make room in their budgets. Another great way to help people improve their credit is to integrate a favourite activity into the rewards system.
You may consider offering a small variety of lifestyle rewards that fit well with your communities of underbanked families. Anything that a large group of people pursues that is part of a healthy lifestyle could be integrated into their current routine to start building credit instead of spending straight out of pocket or a bank account.
Bill Pay Card
Finally, there is the simple fact that everyone has to pay their bills. A bill pay card not only gives you an opportunity to help your customers build credit through bill pay, it can also give you a clear glimpse at how each customer chooses to pay their bills. For everyone who pays their bills through the rewards card, a clear difference will emerge between those who pay like clockwork on their own paydays versus those that scramble in near the deadline every month.
If you can help your underbanked populations pay bills with a credit card, then pay off that credit card with their allocated income, then they will begin to build strong credit in no time.
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