Glasgow tech firm rolls out revolutionary credit rating app

Castlight Financial, which was set up two years ago by former Grant Thornton associate director Phil Grady and Creditfix chief executive Pearse Flynn, has signed-up what it has described only as “a big UK-wide mortgage broker” in the venture.

The app works by merging an individual’s credit data with information from their bank accounts, allowing not only the potential lender, but also the consumer, to see whether they have enough cash to service the debt they are seeking to take on.

Castlight, which has its offices in the Finnieston area of Glasgow, is currently actively marketing its app to a range of financial services businesses and the push to market also involves advanced talks with a provider of secured and unsecured loans, the firm said.

Founder Phil Grady, who hopes the new app can open up the credit market to those locked out due to either poor or non-existent credit histories, said the business has ambitions to not just license the innovation multiple times but to find a large company to join forces with for a wider roll-out.

Mr Grady said: “We anticipate that one of the bigger systems companies will see what this does and we’d think about partnering with them.”

He explained that the app aims to help those who find it hard to access credit through no fault of their own: “When people in the armed forces, for example, come back from time overseas they will have no credit footprint,” he explained, noting that people in such situations often end up paying punitive rates to access credit because they are seen as being at high risk of defaulting.

“It’s about reducing people’s cost of credit.”

“It allows the consumer and the business to see what the person spends in absolute detail and gives them a good idea of what their disposable income is,” Mr Grady added.

“The idea is to stop irresponsible lending and irresponsible borrowing.”

The app will require customers to divulge information about their bank accounts, including passwords, but Mr Grady stressed neither Castlight Financial nor companies using the technology would be able to access that and none of the information would be stored on the system.

Customers will have control over who can access their information by using an “affordability passport” that they can choose to pass on to lenders if they want to take an application further.

Incoming Competition and Markets Authority regulations will ensure banks have the technology to safely and securely allow customers share their transaction history with other banks and third parties to ensure they are being offered the best possible products for their particular situation.

Mr Grady said Castlight’s passport system pre-empts those changes when banks will be compelled to introduce a so-called open application programming interface.