In the United States, building credit can be a daunting task, especially for the 150 million Americans with credit scores stuck below 680. This is because the current credit system is defined by a "credit paradox," where individuals need credit to get credit. Within this system, the only way to increase one’s credit score is to take on expensive debt, perpetuating unfair distributions of wealth and further limiting access to capital at a reasonable price. This challenge is particularly significant for the 1 in 3 Americans who struggle to pay their bills and cannot afford to take on more debt.
To address this challenge, Lamine Zarrad founded StellarFi, an Austin-based public benefit corporation and credit builder working to disrupt the traditional credit system, improve financial literacy, and empower people to take control of their financial journeys. StellarFi is the first ever credit builder that reports all bill payments as credit transactions directly to major credit bureaus, such as Experian®, Equifax® TransUnion®, and Innovis®. The product allows individuals to improve their credit scores without taking on additional debt.
StellarFi manages members’ bills and recurring payments such as rent, subscriptions and utilities, ensuring they get paid on time and reporting them to help members increase their credit score without relying on traditional methods such as high-interest cards or expensive loans. Offering a seamless signup process for members to get started, StellarFi does not require a credit check or deposits and charges no interest rates.
StellarFi's unique approach to credit building is particularly relevant given the current economic climate, which has left many individuals struggling to pay their bills and keep their credit scores afloat. The COVID-19 pandemic has disrupted the financial stability of many households, leading to increased financial stress and uncertainty. As a result, there is a growing need for accessible financial services that can help individuals improve their financial health and stability.
Interplay recently participated in StellarFi’s $15M Series A funding round led by Acrew Capital with participation from ATX Venture Partners, Trust Ventures, FJ Labs, and more. The round will help StellarFi to expand its credit offering and reach more individuals who are struggling to improve their credit scores.
At Interplay, we are committed to investing in high-growth technology companies that take an innovative approach to improving previously outdated and inefficient industries or processes. We believe that StellarFi's mission to transform credit building represents a significant step forward in addressing the challenges facing the credit industry in the United States. With its affordable and accessible approach, StellarFi is well-positioned to make a meaningful impact on the financial health and stability of individuals and families across the country.