Simple, fair and accessible credit

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recent study by the FCA has revealed that millions of Brits will still be paying off their current credit card balances in 2026. That’s over ten years away.

A major cause of this is minimum payments. Credit card holders can choose how much they want to pay back each month, as long as they pay a minimum amount to avoid a fee. That minimum can be as low as 1% of the total balance. To put this in context, it would take someone with a credit card balance of £2,000 up to 24 years to pay it off.

Persistent credit card debt is a problem for a growing number of people and it’s clear that credit card companies can be part of the solution.

Capital One are already paving the way in this area. They recently made headlines with a campaign to encourage their customers paying the minimum to increase their monthly repayments. Customers who responded to the campaign upped their monthly repayments by 73% on average, saving themselves hundreds of pounds in the process.

In 2014 I founded Credit Kudos, a technology startup that uses consumer transaction data to build highly accurate and transparent credit score-cards and affordability metrics. This live data can be used to help lenders to better understand their customer’s financial situations. 

Credit Kudos founder Freddy Kelly

Over the next ten weeks, I’ll be working with Capital One’s Growth Labs to take the great strides they’re making even further.

The FCA’s guidance endorses behavioural ‘nudges’, but we want to actually predict customer’s ability to repay, enabling fairer credit decisions and maintaining healthy behaviour throughout the credit lifecycle.

Credit scores today are like spot-checks that provide little to no visibility for the consumer. Everyone’s financial situation changes continually, so why shouldn’t credit scoring and evaluation adapt as we do?

Credit Kudos enables a direct link between financial behaviour and lending outcomes. Our process automatically connects to a user’s current account to build a financial health score. This can be used to inform lending decisions, and help give a clearer picture of a customer’s financial health. So rather than missing a payment, we could detect income shocks and allow credit providers to make appropriate allowances on the fly.

How great would it be if your credit card provider could one day offer you a better rate, because it automatically knows you got a promotion?

The opinions expressed in this article are the author's own and do not reflect the view of Capital One.