Millions of Americans remain locked out of traditional credit, limited by outdated underwriting practices and rigid financial products. According to the FDIC, about 14.2 percent of U.S. households–or 19 million households–were underbanked in 2023. 

Without access to mainstream financial tools, these households often are forced to rely on alternative financial services with high fees, poor consumer protections and no opportunity to establish credit and improve financial health.

Next-generation secured credit, powered by dynamic funding, helps banks and fintechs bridge this gap—delivering real credit-building tools to the underbanked while unlocking new business growth for issuers. 

Here’s why next-gen secured credit is a game-changer for financial inclusion:

Lower barriers, greater opportunity

Traditional secured credit often required $500–$1,000 deposits—an amount that’s out of reach for many underbanked consumers, 36 percent of whom report struggling to come up with even $400 for emergencies, according to the Federal Reserve. Dynamic funding changes the game by letting users secure only the amount they spend, making credit more accessible without heavy upfront commitments.

Faster access to credit

Legacy secured credit models often delayed credit-building benefits because of securitization account funding lags. Dynamic funding’s real-time transactions eliminate this friction, helping customers start building their credit scores immediately. Credit score growth leads to broader access to affordable loans, insurance and even employment opportunities.

A bridge to financial health

Building a positive credit history can boost an individual’s lifetime access to traditional financial services by over $250,000 in saved interest payments, according to the Urban Institute. Offering a seamless, supportive path to credit-building is a powerful way banks can help underserved populations build long-term financial health.

Align mission with business growth

Financial inclusion is no longer just a regulatory expectation—it’s a competitive differentiator. A whopping 69 percent of consumers say they are more loyal to brands they believe help people improve their financial well-being, according to EY. By meeting this expectation, offering next-gen secured credit supports both corporate mission and business performance.

Next-gen secured credit isn’t just better—it’s transformative.

Banks and fintechs that move now to embrace secured credit with dynamic funding will lead in creating a more inclusive financial future—while building profitable, loyal customer bases and growing their influence in a rapidly evolving market.

Contact us to learn how Galileo can help your bank enter the next generation of secured credit.