Members of Generation Z, which is often defined to include Americans born between 1997 and 2012, represent about 20% of the U.S. population.
As many Gen Zers enter adulthood, banks, credit unions and fintechs are looking for new ways to solve an age-old problem: how to provide credit to young people who lack a credit history.
Navy Federal Credit Union, which is allowing customers to build credit through the payment of their rent and utility bills, is the latest financial institution to target members of Gen Z.
What follows is a look at the Gen Z-focused offerings from Navy Federal and four other banks and fintechs.
Navy Federal Credit Union
Navy Federal Credit Union recently adopted a
The credit union said it has integrated Bloom's product as a checking account feature as part of a handful of updates to its offerings.
The partnership gives Navy Federal's customers the option to report up to five existing payments, including rent and utility payments, from their checking accounts to TransUnion, one of the three main credit reporting bureaus.
Justin Zeidman, vice president of strategy at Navy Federal, told American Banker that through this product, rent payments can be treated as credit history in a way similar to mortgage payments.
"It allows the credit bureaus to see and track the responsible behavior of consumers who would have otherwise been completely invisible to the bureaus," Zeidman said.
He added that this product is especially relevant for Navy Federal's users — people who are serving or have served in the armed forces — because many enlisted military members join at a young age, before they have developed a credit history.
"These members are often looking for housing as they move from location to location, and access to credit can become incredibly important to ensure that the needs and demands of military life are served effectively," Zeidman said. "That can be challenging when you're very young in your financial life and have either made some missteps or have no credit history whatsoever."
Block
Jack Dorsey's payments and commerce company Block is hoping to expand its peer-to-peer payments platform Cash App to more Gen Z consumers, while at the same time increasing the penetration of its small-dollar lending product, Cash App Borrow.
Dorsey said on the company's
Gen Z consumers are an important segment of Block's customer base and one that it has also targeted with its buy now/pay later product, Afterpay. The Federal Deposit Insurance Corp.'s decision to allow Block to originate and service its own loans, which are made through its Square Financial Services unit, doubled the total addressable market of customers on its network it can offer its loans to and improved unit economics, according to the company.
Lending is a key way to continue to engage with users, Block said. Cash App Borrow had nearly $9 billion in originations in 2024, with an average loan size of less than $100, according to the company.
SoFi
Last fall, SoFi expanded its partnership with Nova Credit to access the fintech's consumer-permissioned data and analytics product. The technology was designed to help banks and other financial firms underwrite loans and assess credit risk and improve credit eligibility.
Nova Credit's offering analyzes consumers' bank transaction data in an effort to provide "a more real-time and granular view" of their financial health, the fintech said when the SoFi partnership was announced.
The limits of traditional credit reporting, which logs consumers' histories of repayment, constrain access to credit for people who haven't used credit, Nova Credit CEO Misha Esipov said
"In our current credit system, there's a catch-22," Esipov said at the time. "You need to have access to credit, and only when you have access to credit can you build credit history. But only when you have credit history can you get access to credit."
Synchrony
Synchrony Financial in Stamford, Connecticut, also looks beyond the traditional credit score to assess the credit-worthiness of potential customers. The company, which is one of the nation's largest issuer of co-branded cards, began investing years ago in a credit decision-making platform called PRISM.
PRISM uses data and analytics to gauge credit-worthiness. "By identifying those who deserve more, or less, credit than a credit report would suggest, PRISM helps people responsibly finance what they want while protecting them from becoming overextended," the company wrote in its 2024 annual report.
Anita Chalkley, senior vice president of credit acquisition at Synchrony,
The tool collects data from "hundreds of disparate … sources" to offer "a more holistic view" of an individual's credit-worthiness, Chalkley told the publication.
"By combining scores and attributes from multiple credit bureaus, engagement level data from clients, internal data from existing Synchrony customers and attributes and insight from alternative data sources, Synchrony can instantly make better informed decisions," Chalkley said.
Fizz
College-age consumers are known more for lacking funds than for steady payment habits, so they aren't highly sought after by credit card lenders. But a two-year-old payment card is
Fizz, launched in January 2023, offers young adult consumers a spending card that has some credit-like features, such as a daily spending limit, but also requires daily repayment. The spending limit is based on a number of factors, including the balance in a user's bank account, along with their income.
Users can pull out their Fizz card throughout the day. Their tab is settled each night via a lump-sum payment. Missed payments trigger an automatic lock. Fizz does report to credit bureaus, providing a means to build a healthy credit profile. It also provides perks such as cash back and budgeting software.
Fizz says it has helped "tens of thousands of college students" at more than 300 schools.
"We started this company because we saw our friends, regardless of their economic background, not being able to be approved for traditional credit cards or falling into debt," co-founder Scott Smith said. "For too long, students have had adversarial relationships with their credit card companies. We wondered what it would be like if we could rebuild that relationship from scratch."
