SAN FRANCISCO--(BUSINESS WIRE)--Vouch, the first social network for credit, today introduced an entirely new model to lending that makes it easy for consumers to improve their creditworthiness and get better rates on loans. The company is pioneering a network that helps borrowers who believe they are worth more than their credit score to pool and share their creditworthiness. With nearly every consumer today participating in the modern credit system, Vouch believes it is time for a universal shift towards proactive and collaborative credit enhancement.
“Forty million Americans are paying too much for loans. This represents billions of dollars in interest that should be staying in their pockets,” said Yee Lee, co-founder and CEO of Vouch. “Today’s lending system wants you to have a perfect financial track record for seven years in a row. That’s hard for anyone to build and maintain. At Vouch, we believe you are more than your FICO score, and are helping everyone get the credit they truly deserve.”
Led by a team of PayPal alumni and former banking executives, Vouch is on a mission to lower costs and increase access to financial power. The company allows anyone to bank on the trust they have already developed amongst their family, friends and colleagues to proactively build credit before they need it. By taking the network surrounding borrowers into consideration, Vouch can more accurately determine a borrower’s long term creditworthiness and therefore offer lower interest rates, larger loan amounts, or both.
With the rise of Big Data and advanced algorithms, traditional lending has increasingly moved away from personal references when evaluating borrowers, opting instead for technology-driven approaches that make predictions based on an individual’s past behavior. But the greatest limitation in today’s loan decision-making process is not a lack of data about a borrower; it is the inherent isolation by which lending decisions are made.
“The current lending system puts borrowers under a microscope, and Vouch is providing a wide-angle lens view,” said Lee. “We are creating the platform and analytical tools to do what the banking industry has never before been able to do at scale: incorporating a borrower’s social network into credit decisions. This leads to reduced credit losses and savings that can be passed directly on to borrowers, creating billions of dollars of purchasing power and helping the economy grow.”
People can start building their credit network with Vouch today by visiting https://vouch.com or downloading the Vouch Mobile App in the iTunes App Store and on Google Play. Prospective borrowers can then apply for loans and ask friends, family and other personal connections to vouch for them. People vouch for a borrower by choosing an amount of money and agreeing to pay back that amount if the borrower defaults on their loan. Vouchers only pay Vouch if the borrower does not. Vouches are used alongside standard financial data to gain a more complete picture of creditworthiness, which can help the borrower get a larger loan, lower their interest rate, or both.
Vouch is the first social network for credit, helping borrowers proactively build their creditworthiness to get better rates on loans, larger loans, or both. Founded by PayPal alumni and former banking executives, Vouch provides a network for everyone, regardless of their credit history, to build credit for the future. In contrast to other consumer lenders that focus on an individual’s credit score in isolation, Vouch analyzes the network of people who know you best to make more informed decisions about your creditworthiness. The company is based in San Francisco, California, and is backed by IDG Ventures USA, First Round Capital, Greylock, and AngelList. For more information, please visit www.vouch.com.