International students using Prodigy Finance loans will now have their payments count towards their credit scores, the company has announced, meaning applicants will be able to secure other loans in the US.
“Global talent is increasingly mobile and it’s essential to break down barriers to financing”
The firm – which raised US$1bn over 2018 to allow more students to participant in international education – will now be reporting repayments on its student and refinance loans to Experian, one of the USA’s three consumer credit reporting companies.
The move will make it easier from international repaying borrowers living in the US to build a local credit profile and will be more likely to gain access to superior financial products in the domestic marketplace, according to Prodigy.
“Reporting loan repayments to Experian is another step we’re taking to assist international graduates formally establish their domestic credit history, helping them build a solid financial foundation in their new country,” said Cameron Stevens, founder and CEO of Prodigy Finance.
“Global talent is increasingly mobile and it’s essential to break down barriers to financing. Reducing financial hurdles, inherent in the current landscape, provides international students and graduates an opportunity to study, work and thrive,” Stevens added.
US bureaus don’t recognise credit history from graduates’ home countries, and building a US score is often a slow and expensive process that requires sufficient payment data, the firm noted.
Without sources like payments made on student loans, international graduates may struggle to amass enough data to receive a score in the years following their graduation, Stevens added.
The payments will “will serve as a crucial source of data for these US residents, clearing the path to improve their individual credit scores on an accelerated timeline”.
By offering an auto-debit option for borrowers to make payments online or via mobile to ensure on-time payment, Prodigy also aims to help students and alumni keep their credit scores high.
In 2018, Prodigy announced a refinancing product for international graduates working in the UK or 24 US states aiming to save them at least US$20,000 over the lifetime of the loan.
“Providing them with the tools to help establish themselves financially early on will help in their long-term success, which ultimately benefits the global economy,” Stevens concluded.
