Boosting access to affordable credit through consolidation lending

Fair4All Finance and ClearScore partner on new debt consolidation technology to boost access to affordable credit by £0.5bn and help an additional 160,000 by 2028.

We’re delighted to announce our partnership with ClearScore, the financial services marketplace, to develop a unique debt consolidation loan technology to boost access to affordable credit for people in financially vulnerable circumstances.

ClearScore’s proposition ‘Clearer’ allows direct settlement of consumer debts, unlike most other debt consolidation loans, thereby eliminating the risk that the funds are not used to pay off existing credit cards and loans. 

It is expected that rolling out this debt consolidation proposition at scale will significantly expand access to loans, reduce interest rates paid by borrowers, reduce risk for lenders and ultimately help hundreds of thousands of borrowers.

The funding, linked to our consolidation lending pilot, will be used partly on development costs to build an automated and scalable debt consolidation solution which can be used both on the ClearScore marketplace as well as white-labelled for third party online marketplaces and for lenders to use in their direct channels. 

We have agreed a revenue sharing mechanism with ClearScore, that will enable us to recover the development costs in time.

Part of the funding is also intended to reduce the cost of lending to financially excluded people through support for loan fees, resulting in an expected additional £500m of lending across an estimated 45,000 debt consolidation loans.

ClearScore originally developed the Clearer direct settlement technology in 2023 and worked with personal loans provider Abound on a pilot project to build out the proposition. The pilot successfully proved that direct settlement of consumer debts helps consumers that are currently financially excluded to access debt consolidation loans and helps consumers get better interest rates, as well as preventing them from falling further into debt. 

The collaboration between ClearScore and Abound also proved that lenders could issue more loans by improving affordability and could offer better interest rates across debt consolidation loans. Overall loss rates can be lowered plus direct settlement of debt helps lenders comply with Consumer Duty regulations. 

Kate Pender, Deputy CEO, Fair4All Finance, said: 

‘We’re delighted to be working with ClearScore on their new Clearer proposition and also with the lenders who use it to reach people in financially vulnerable circumstances. With millions of people financially excluded in the UK, fair and affordable credit is a vital safety net that many can’t access.

‘Debt consolidation lending in particular is a great solution for the cost of living crisis. It can reduce people’s monthly outgoings and also cut the amount of interest they have to pay overall. This direct settlement technology will ensure more people are able to access a consolidation loan, improve their creditworthiness and steer clear of problem debt. 

‘We look forward to seeing how Clearer can scale over the coming years and help people in financially vulnerable circumstances pay materially less for their existing debt.’

Andy Sleigh, COO, ClearScore, said:

‘This funding represents a significant step forward for the expansion of debt consolidation lending in the UK. Our model suggests that many thousands of additional borrowers will be able to access a debt consolidation loan within the next few years, with our users experiencing an improvement in their creditworthiness and reducing their level of indebtedness. This kind of impact on financial mobility cannot be understated and aligns perfectly with the FCA’s focus on increasing access to affordable credit and good consumer outcomes as part of Consumer Duty.’

A significant current challenge in the debt consolidation loan industry is that when lenders provide debt consolidation loans, they don’t have a way of sending the money directly to the creditors to pay off a customer’s debts. As such, they must assume that the customer will spend the money rather than pay off their other debts. This leads to ‘double counting’ in the underwriting process, which affects affordability assessments. This lowers the number of people they can lend to and increases APRs. 

From a customer perspective, the current debt consolidation process risks them falling further into debt if they don’t repay their existing credit cards and loans.  

Clearer by ClearScore mitigates all these drawbacks and is the only automated and scalable solution in the market. ClearScore estimates that its proposition can boost debt consolidation by 20% which would mean up to an additional 160,000 consumers gaining access to a loan by 2028.

Fair4All Finance are always keen to collaborate with new partners who are willing to try new ways of reaching more of the millions of people in financially vulnerable circumstances. Please do get in touch at if you’d like to talk.