Pinwheel Investigation Highlights Opportunity to Fix Flawed Credit Scoring System That Prevents Consumers from Accessing Financial Products

  • 60% of the assets of United States feel that their credit score does not accurately reflect their degree of financial responsibility. Consumers’ top concerns relate to data being up-to-date (71% expect data to assess their creditworthiness for loan applications to be up-to-date in the last 24 hours) and that key details are not taken into account (67% chose income as the number one factor they would like to see in their credit score, followed by utility and phone bill payment records).
  • Consumers, especially those with lower scores, are aware of the negative impact of these inefficient and inaccurate lending models on their finances. Those with poor credit are eager to share information that accurately reflects their financial situation. More than 80% of non-privileged respondents are willing to share their income and payroll data with financial service providers.

NEW YORK, October 25, 2022 /PRNewswire/ — Today, Pinwheel, the leading provider of income and employment data designed for next-gen fintech innovation, released a new survey revealing consumer challenges and attitudes regarding odds credit, solvency and access to financial products such as loans or access to earned wages (EWA).


The survey results of 2,000 people working in the United States demonstrate the inefficient and inaccurate ways of collecting and interpreting information to determine a person’s creditworthiness and overall financial responsibility:

  • More than 75% of people working in the United States believe that a credit score should not be the only criterion for obtaining a loan. Half of respondents said the credit reporting system lacked information showing they were financially responsible: income, utility bill payments, phone bill payments and bank account balances were the main alternative criteria suggested.
  • Nearly 70% of respondents ranked income as the most important factor to consider when determining creditworthiness.
  • More than 70% expect that when they apply for a loan, the income information used to determine their approval will be current within the last 24 hours. Key mortgage application decisions can be based on data that is several months old.

“The current financial system is unfair and inefficient when it comes to determining a person’s creditworthiness and the types of financial products offered,” said Kurtis Lin, co-founder and CEO of Pinwheel. “We still live in a world where income, arguably the most important part of a person’s financial life, is not factored into their credit score. The same world where regular utility payments and punctual means nothing and mortgage applications are dependent on credit bureau reports which don’t even include income data.This system negatively impacts everyone, and disproportionately low-income consumers .


An extremely high number of consumers, over 80%, are comfortable sharing their income and payroll data; in some cases under certain conditions:

  • 34% said they would share in exchange for access to better financial products.
  • 21% said they would feel comfortable as long as they gave consent.
  • 27% said they would freely share this information.

A small fraction, just 18%, said they would not be comfortable sharing this information.

“We are entering the next era of great fintech innovation, which must focus on increasing financial equality through the innovation of tools and services that can help consumers live the best financial lives possible,” Lin said. “We’re actually able to start putting solutions like earned wage access and dynamic loans into the hands of the overwhelming majority of consumers who want these products, so they don’t need to look for payday loans or high interest credit cards. From the perspective of financial institutions, the decision to market these services should be obvious. The current system locks in a large portion of the population that are potentially valuable consumers. And because these outdated models loom large, it creates a contentious relationship between financial institutions and consumers. I’m excited to work with our partners and customers, like the folks at Nirvana Money, to transform a vicious financial system into a more virtuous one.

“Too many Americans struggle to access financial services at fair prices, said Bill Harris, founding CEO of Nirvana Money and former CEO of PayPal. “We share Pinwheel’s commitment to serving these customers by providing good credit to people who want to strengthen their financial stability. Pinwheel’s technology and products are important in making this a reality.”


Consumers believe that banks and fintechs should be their allies and offer a wider offer of personalized products:

  • Consumers want financial literacy tools and expect their financial institutions to provide them. In fact, respondents cited frequently updated financial statements and dynamic loans (terms can be proactively changed based on your most recent financial situation) as some of the features that would be most useful to them.
  • About 60% of respondents want personalized financial experiences such as automatic line of credit adjustments and proactive loan repayment plans based on changes in their income.
  • More than half of respondents are interested in E.W.A. services of their bank or fintech.

In the absence of better loan products or to avoid more predatory options, consumers often seek loans from family and friends. Unsurprisingly, those whose income is less than $50,000 (66%) and poor credit (79%) are more likely to ask a friend or family member for money, with more than a third of people borrowing money more than twice . Yet 89% of people have repaid their friends and family.

“This particular data point tells a sad story about people in need who have been let down by the financial system,” Lin said. “These people may have feared being turned down or given high interest options. They were wrongly labeled as insolvent with a repayment rate of almost 90%. There is no reason why a bank or a fintech did not offer them a solution, something like E.W.A. or a cash flow-based loan tailored to their financial needs.”

Consumers are losing confidence that their main financial relationships, especially banks, are able to meet their needs. In fact, only 27% believe that banks provide superior access to fairer financial products compared to fintechs. The reason this perception is declining is clear: 77% of unprivileged consumers surveyed said they did not receive full approval for their last loan application. Meanwhile, 8 in 10 of those same applicants would have been willing to share their income and employment data to improve their chances of getting full approval. There is a desire among the majority of consumers to be rated more holistically, but legacy credit rating precedents lack key information about people’s financial status.

Visit here to learn more about the study, Beyond the Credit Score: Driving Consumer Credit into the Future with Income Data.

About Pinwheel: Pinwheel is the leading API in the income and employment market. With Pinwheel, fintechs and financial institutions are empowered to create the next generation of financial products that will help create a fairer financial system. Pinwheel provides access to consumer-authorized income and employment accounts and actionable insights that help them make sense of the data they need to tailor their tools and services to consumers. Pinwheel’s platform has enterprise-grade security protocols to power connections to over 1,600 platforms (covering 80% of US workers), over 40 Time and Attendance (T&A) platforms and more than 1.5 million employers. From this point of connectivity, leading fintechs and financial institutions (such as Block, formerly Square) rely on us to power direct deposit switching, access to earned wages, income verification and employment, and create new innovative products. Pinwheel is also a Consumer Reporting Agency (CRA), making the company the only provider in the space to offer Fair Credit Reporting Act (FCRA) compliant earnings and employment data that lenders can actively use in decision making. Pinwheel is trusted and funded by $77 million by leading investors such as GGV, Coatue, First Round Capital, etc.