Varo Bank Launches Visa Program To Help People Build Credit

FinTech startup Varo Bank is launching a program to help people build credit or improve their scores, the digital lender said in a press release on Thursday (Feb. 25). “A healthy credit score is so important to many of the foundational aspects of our daily lives — renting an apartment, accessing utilities, buying a car or even applying for a job in many cases,” said Colin Walsh, CEO and founder of Varo Bank, N.A.

Walsh added that long-term financial fitness starts with “access to affordable credit,” which is why the company decided to develop their first credit card to “directly target one of the biggest challenges facing millions of American consumers today: responsibly building, repairing and accessing credit.”

The country’s first all-digital nationally-chartered bank, Varo launched the Varo Believe Program to help the 45 million “credit invisibles” — people with insufficient credit history — to qualify for a credit card or loan. The program, which includes a Visa card and credit monitoring, is linked to a Varo checking account in real time. The Visa program doesn’t require a security deposit, and there are no monthly or annual fees.

Varo reports people’s payment history to the three major credit bureaus. According to the company, about a half-million millennials and Gen Zers don’t have good credit, and one in five Americans doesn’t have a credit profile at all.

Varo was awarded a full-service national bank charter in July by the Office of the Comptroller of the Currency (OCC). This designation enables Varo to offer financial services backed by the Federal Deposit Insurance Corp (FDIC).

In June, Varo raised $241 million in a Series D funding round, for a total of $419.4 million, to help it become a national bank. The Series D was co-led by new investor Gallatin Point Capital LLC, a private investment firm, and existing investor The Rise Fund.