Credit score-based underwriting is so 2024

Too often, hardworking people fall into crisis because of something as small as a car repair or an unexpected bill. One powerful example is Wendy, a beloved preschool teacher who lost her job simply because she couldn’t afford to fix her vehicle. Her story reflects a larger reality: the majority of Americans are living paycheck-to-paycheck, with little to no cushion for life’s surprises. Microloans—especially those offered through mission-driven institutions like credit unions—can be the difference between financial ruin and recovery. They aren’t just loans; they’re safety nets that give people a chance to stay employed, stay housed, and stay afloat.

Credit unions are in a unique position to reach younger, underserved members who are often overlooked by traditional lending models. These members may have subprime credit scores, not because of poor financial behavior, but because they lack a credit history. Fintechs are already tapping into this market by meeting their immediate needs—primarily liquidity. If credit unions adopt alternative risk assessments and flexible lending models, they can both fulfill their founding mission and stay competitive. It’s time to reimagine how we evaluate financial health and deliver the kind of support that builds long-term resilience for the next generation.