Financial Inclusion Stories: Building Credit Through Small Dollar Loans

TransUnion is proud to work alongside the Credit Builders Alliance (CBA) as a long-term partner in helping to increase financial inclusion for borrowers with low or no credit histories. A national network dedicated to building the capacity of hundreds of diverse and growing nonprofits across the US, CBA serves as a bridge to the modern credit reporting system — helping millions of individuals participate in mainstream financial systems by building credit.

TransUnion provided grant funds for small-dollar loans to CBA Fund, CBA’s CDFI intermediary, which supported 190 consumers from largely Black communities. One consumer who received funding from our investment, Lavar Rounsville, saw an opportunity to shape his financial future while building credit through loan repayment.

Lavar, a Little Rock, Ark. native who grew up in a low- and moderate-income community, never received formal financial or credit education. After four years of incarceration, he ultimately found himself in challenging times with a credit score averaging at 450.

Upon his release, Lavar learned about People Trust and their Community Loan Fund which included a grant program for newly released individuals needing support with re-entry. Not only was Lavar able to secure a re-entry grant, he also secured a small dollar loan from People Trust.

“The small dollar loan program has been a lifeline to my life, and now I can see the light of many opportunities at the end of the tunnel,” shared Lavar. “I went from being unbanked to banked — and I have a brighter future for me and my children.”

With greater access to capital, Lavar was also able to secure and maintain employment.

“That loan allowed me to catch up on bills, change my living situation and helped with transportation,” Lavar continued. “Now my credit is doing great, going from 450 to 607.”

Stories like Lavar’s are key to illustrating the importance of small dollar loan repayment. Borrowers with low or no credit can build positive credit histories and begin participating in the mainstream financial ecosystem — increasing their access to financial opportunities and affording long-term sustainability.

TransUnion also recently made an additional investment to focus on increasing lending in predominantly Latino communities. Through our partnership with CBA, we also provide credit reports at a discounted rate, offer scholarship funds to help onboard new members and increase access to training opportunities. We also help onboard more members as data furnishers; with our support, CBA onboarded more than 30 new data furnishers, representing 11,000 new tradelines for consumers in 2022.

To learn more about TransUnion’s commitment to financial inclusion, please visit our website. We also encourage you to learn about the Credit Builders Alliance and People Trust Loan Fund.