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Reconsidering the Role of Credit Scores: Empowering Entrepreneurs through Different Data

For over ten years, American Capital Group has adopted a balanced approach to evaluating creditworthiness.

For over ten years, American Capital Group has adopted a balanced approach to evaluating creditworthiness. We firmly believe that assessing someone's eligibility for credit goes beyond looking at a three-digit number. By considering data such as income streams, account balances, and payment history, we gain insights into applicants' overall financial well-being. We have witnessed the benefits of looking beyond traditional scores.

According to a recent Plaid report, 63% of respondents believe that relying solely on their credit score does not accurately demonstrate their ability to repay loans. More notably, 60% of participants feel that including financial information alongside credit scores could provide lenders with a more precise assessment. These consumer perspectives align with our experience, which has taught us that heavily relying on credit scores restricts access to financing.

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The findings indicate that consumers  acknowledge the limitations of relying on credit reports. Most people are willing to provide proof of their earnings, timely rent payments, and assets that complement their credit history. This willingness allows us to make lending decisions for individuals who demonstrate financial responsibility, even if there are minor variations in their credit reports.

At American Capital Group, we offer solutions such as lines of credit and revenue-based financing. We embrace the concept of permissioned open banking connections to ensure transparency. Our advanced technology, along with companies like Plaid, enables us as lenders to provide better access to capital.

While credit scores have served a purpose in the past, their limitations have become increasingly apparent in today's changing landscape. We take pride in our mission to support underserved entrepreneurs by considering their ability to repay loans. Let's connect and explore personalized funding options that cater specifically to your business requirements.

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