Abound embeds ClearScore debt-consolidation tool in loan applications

Abound has agreed to embed ClearScore’s automated debt-consolidation technology, Clearer, directly into its loan application process, extending a tool already used through the ClearScore marketplace. ClearScore said the integration is intended to help thousands of borrowers consolidate and repay existing debts by directing loan proceeds to creditors as part of the application journey.

The partnership broadens an existing relationship between the two companies. Abound was a launch partner for Clearer in 2024 and has offered Clearer-powered consolidation loans to customers originating through ClearScore’s marketplace for two years, according to ClearScore.

Clearer is designed to address a common weakness in debt-consolidation lending: the borrower receives a new loan but may not use the funds to repay the liabilities being consolidated. Under the Clearer model, the money from the new loan is automatically applied to outstanding debts, reducing the manual steps involved in settling multiple balances.

ClearScore said its research found that more than 60% of people taking out consolidation loans did not use at least half of the proceeds to repay debts. It said those borrowers were nearly three times more likely to miss repayments than borrowers who used the funds to clear existing obligations.

Lender adoption

Abound becomes the third lender to place Clearer inside its own loan applications, following Stream and Monzo, according to ClearScore. ClearScore said it has processed more than £40 million in payments linked to Clearer-powered consolidation loans to date.

For lenders, ClearScore presents the product as a way to confirm that existing liabilities are repaid, improve risk assessment and pricing, reduce default risk, lower the cost of serving customers through digital processes, and support Consumer Duty and foreseeable-harm obligations.

The arrangement also gives Abound a way to offer automated consolidation loans beyond customers who arrive through ClearScore’s marketplace. Abound is among lenders using open-banking data in credit assessment, while ClearScore operates financial marketplaces and technology products for consumer credit distribution.

Tom Markham, chief commercial officer at ClearScore, said the company was addressing long-standing problems in consolidation loans and that the Abound partnership would expand the reach of the product. He said Abound had participated in the pilot phase and that the companies were now extending the relationship to include white-labelled technology within Abound’s credit application journey.

Sam Power, chief growth officer at Abound, said the lender had used Clearer for two years for customers coming through ClearScore’s marketplace. He said expanding use of the technology would help more customers consolidate higher-cost debt and support people who are often excluded from mainstream options.

This story draws on original reporting from Finextra Research.