In a bid to win customers, Apple and Goldman Sachs are approving the Apple Card applications of even sub-prime borrowers. Interestingly, today’s report also claims that Apple initially thought of launching the Apple Card back in the 1990s itself.
Back in the 1990s, Apple held discussions with Captial One on launching a card similar to Apple Card. Back then, Steve Jobs “had an aversion” to rejecting any customer who applied for the card. The company tested the card but ultimately did not roll it out to consumers in the 1990s.
The Cupertino company is following a similar trend with the Apple Card this time around. Right from the get-go, the company has wanted that Apple Card is available to almost the entirety of its 100 million+ iPhone users in the United States. Due to this, Goldman Sachs has been approving Apple Card applications for users even with low credit scores.
The bank, which is in charge of deciding who gets the Apple Card, is accepting some applications from users with less-than-stellar credit scores, according to people with knowledge of the matter.
A FICO score of 660 is considered sub-optimal and loans to such users usually turn sour. Goldman Sachs is known to give personal loans to borrowers with sub-prime credit scores, though this does expose the company to a greater amount of risk as well. The company will be limiting the credit limit of customers with low credit scores. This way, it will curtail its risks.
One new Apple Card customer, Ed Oswald, said his FICO score is about 620. The Reading, Pennsylvania-based copywriter said he had been using a subprime card from Merrick Bank.
“I was absolutely shocked I got it,” Oswald said. “I have a lot of collections from two or three years ago when I was in a really rough spot. When I heard it was with Goldman Sachs, I figured they were going for the high-income set.”
Apple has made the Apple Card available to its selected customers under its preview program. A wider rollout of Apple Card for all iPhone customers in the United States is expected to happen later this month.[Via CNBC]