Berkeley startup aims to provide credit cards to students and immigrants

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TomoCredit founder and UC Berkeley MBA student Kristy Kim smiles during a presentation to potential investors in New York City. She holds up the credit card she offers to people who don’t have a credit history and can’t be approved by the big banks. (Photo courtesy of Kristy Kim)

When Kristy Kim graduated from college, she needed a car to get to Palo Alto for a job in finance. But like many young people and recent immigrants, Kim had no credit history and couldn’t get approved for a loan to buy a car.

Kim ended up borrowing money from her family to buy a car, but the problem of not having access to credit kept pestering her.

“It was the first time I realized that if you don’t have a credit score, by default the banks think you’re bad with credit,” said Kim, who is currently pursuing her MBA at Haas. School of Business.

Therefore, last year as a graduate student Kim co-founded her own credit card company, TomoCredit, short for Tomorrow’s Credit, providing credit cards to people who do not have a credit score and cannot get credit approval from the big banks.

The startup, which employs four other immigrants from countries around the world, has raised more than $ 3 million and has more than 15,000 people registered to use their credit cards. Kim said she owed much of the company’s success to her education at Berkeley.

“Berkeley is where I first had this entrepreneurship bug,” Kim said. “I learned from real entrepreneurs who came from outside the university and who shared their knowledge with us. The business community and the courses offered here have really helped me understand what the expectations are for running my own business.

One such course, a blockchain and cryptoeconomics course taught by Berkeley Haas professor Gregory La Blanc, was a catalyst for the creation of TomoCredit’s business model.

Kim spoke as a former guest speaker in the class at La Blanc in the summer of 2018 and asked students about their experiences accessing credit.

The data Kim collected served as market research which she then used to understand trends and the real demand that a product like TomoCredit could meet college-aged students.

“Kristy has come full circle here at Berkeley,” said Kurt Beyer, professor at Berkeley Haas, who taught Kim as an undergraduate student in his Entrepreneurship and Innovation course. “She is now a guest speaker in my graduate entrepreneurship class. I always knew she would be a successful entrepreneur. I think it has a lot to do with his immigrant background and his persistence. “

The right thing to do

Kristy Kim with her team of four Tomocredit posing on stage

Kristy Kim, center, and the rest of her TomoCredit team in New York City during the Barclays Accelerator Demo Day last December. (Photo courtesy of Kristy Kim)

Kim started out by trying to figure out why banks like Wells Fargo, American Express, and Bank of America relied on credit scores when so many people – potential customers – didn’t have credit scores.

“I have met with senior executives and told them that there are over 30 million users with this problem, including 53% of students who do not have a credit score at the moment,” recalled Kim. “They were all aware of it, but they were unwilling to expose themselves to unsuccessful regulatory testing. “

It was the opening of TomoCredit. The company offers 0% interest rate credit card loans ranging from $ 100 to $ 10,000. No credit score is required.

Instead, the company analyzes two years of an applicant’s banking history and confirms sources of income to assess the person’s credit reliability.

This one-stop underwriting policy gives TomoCredit the opportunity to disrupt the typical credit bureau system and extend credit to many consumers who are financially responsible, but cannot access traditional credit systems, Kim said.

“When all these big banks and big players were like, ‘No, it can’t be,’ Kristy refused to listen to that,” said Rhonda Shrader, executive director of the Berkeley Haas Entrepreneurship Program. “She has found an elegant way to solve an important and urgent problem.”

As someone who grew up in South Korea and came to America at the age of 11, Kim said helping immigrants without a credit score was one of the main reasons TomoCredit was created. .

“For us and our team, we are all immigrants, and we know that betting on immigrants is the right thing to do,” she said.

Last summer Kim decided to take a break from her MBA classes to focus on managing TomoCredit. She hopes to return to school in the near future.

“Companies can copy us, but we’ll do our best to execute faster and be more innovative,” Kim said. “These are traits, as an entrepreneur and as a student, that Berkeley instilled in me.”

Correction: A previous version of this story incorrectly stated that Kim graduated from UC Berkeley in 2011.

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