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Zilch Launches Product to Improve Credit Access and Management

woman checking finances

Zilch, a U.K.-based ad-subsidized payments network, has launched a new credit product called Zilch Up.

Aimed at empowering individuals who are typically excluded from mainstream credit, this offering provides access to millions of people to build their financial profiles safely and responsibly, without incurring any interest charges, the company said in a Thursday (Oct. 12) press release.

One of the key features of Zilch Up is its ability to improve credit scores, which was previously not possible with Zilch, according to the release. With approximately 5 million people in the U.K. considered credit invisible, Zilch Up provides customers with the tools to enhance their credit scores and increase their credit limits. Starting with credit limits as low as 50 pounds (about $61), Zilch Up offers all the features of the original Zilch product, with a few changes tailored to its target users.

Customers who opt for Zilch Up have the flexibility to pause credit and still use Zilch as a debit card through the Pay Now option, while also earning rewards, the release said. Alternatively, they can choose to toggle in-app to Credit mode and make a first installment payment of 50%, with the remaining 50% payable over six weeks.

In addition, Zilch Up customers will soon have access to credit coaching and the ability to view their credit scores within the Zilch app, per the release.

Zilch offers customers a regulated offering in partnership with leading credit referencing agencies (CRAs), according to the press release. This means that for the first time, consumers can improve their credit scores by utilizing interest-free credit through the company’s buy now, pay later (BNPL) borrowing, with the consumer protections of a regulated product.

Philip Belamant, CEO and co-founder of Zilch, said in the release: “For too long, millions of people in the UK have had to struggle with limited or no access to credit due to thin and weak credit files. In a digital finance world, this is causing them the stress and crippling pain of funding unaffordable high interest costs plus the danger of hard-to-understand late fees, merely to access credit.”

PYMNTS Intelligence has found that BNPL use spans generations at a time when traditional credit is more difficult to access and increasingly expensive to maintain. For example, Generation Z has a 14% share of consumers using this credit product, according to “The Credit Accessibility Series: BNPL’s Wide-Ranging Impact on Consumers and Merchants,” a PYMNTS and Sezzle collaboration.