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Why Merit Matters in Student Lending

When you apply for a traditional student loan, lenders often pull your credit history and credit score. These data — at a high level, a summary of your payments and balances on traditional products like credit cards, mortgages, auto loans, and more, plus a score that “summarizes” these factors into one metric – are, by definition, very narrow. For those who haven’t used many traditional credit products, a credit report may be pretty thin, if it holds anything at all. And the summary credit score, if it exists, will subsequently be built on very little data. Reducing creditworthiness to a single dataset or a number between 300 and 850, particularly for those with limited credit experience, can be fairly exclusionary.

Merit, however, can tell a richer story. Meritize has developed a one-of-a-kind platform that can consider non-credit experiences and use them to assist in making a lending decision. By looking beyond credit scores and examining merit, Meritize can potentially offer more tailored loan options than traditional lenders – including different terms or relaxed cosigner requirements.

Merit data can take a variety of forms, each providing a unique view of the story of you. On a transcript, each grade received or credit hour completed represents a milestone in your pursuit of knowledge. Achievements like a High School Equivalency (“HSE”) certificate showcase your determination and commitment. Your military records can provide insight into your training, discipline, and leadership. In sum, information from these documents can tell Meritize as a lender about your resilience, passion, and dedication, any or all of which can translate to creditworthiness. When added to more traditional credit data, Meritize can move beyond the constraints of a single credit score, embracing a more holistic approach to assessing your potential and readiness for a loan.

To be transparent, Meritize doesn’t always ask for an applicant’s merit. Meritize does use credit data and scores in its underwriting, and in some instances, the story those data tell may be insightful enough to render a decision. However, there are many instances where Meritize will request more information – details from your academic or military history, or achievements outside the traditional world of credit. In those instances, Meritize encourages applicants to submit their merit documents with their application. Through this process and incorporating these comprehensive merit records, Meritize aims to revolutionize student lending, continuously looking for more ways to unlock opportunities for those who need them.