When Kristy Kim attended UC Berkeley, she couldn’t get approved for a credit card. Credit-less young people typically can’t get approved for a first credit card without a parent cosigner; many students, including poorer and international students, may not have that privilege.

Having moved to America from South Korea, Kim was also aware this was a problem overwhelmingly affecting immigrants, though she was just 11 when she immigrated. Without a chance to build up credit, even older immigrants, who may have had strong financial practices abroad, find that whatever metric was used in their home country is worthless in the U.S. system, and they must start again from scratch.

In order to create a more inclusive system, and better equip those previously excluded from economic opportunity, Kim founded Tomo Credit, a fintech company that allows people without a credit score to apply for a credit card and get the usual benefits, like cashback perks, while also building up their credit on a fast-track schedule. The company’s aim is to help customers practice good financial health and not fall prey to overspending, which can happen when dealing with traditional card issuers that collect high interest and late fees.

Credit scores weren’t always a thing. The FICO score, as one kind of credit score is known, was conceived in 1956 by an entrepreneur and a mathematician who wanted to create a national standard. But a new study estimates that 21 million U.S. consumers are credit invisible, having no credit history whatsoever: 40% of people under 25 and 65% of 18- and 19-year-olds are invisible, per the study. It also found a minority and socioeconomic bias: 30% of low-income people are invisible, as are 27% of Black people (versus 16% of white people), https://getbadcreditloan.com/payday-loans-al/russellville/ and most undocumented immigrants. In a blog post on the study, Experian, one of the U.S.’s three major credit bureaus, noted that, being labeled credit invisible can hinder participation in the financial system and prevent populations from accessing the socioeconomic opportunities that go with it. Lees verder →