Tomocredit To Offer Credit Cards to People with Poor or No Credit History

February 12, 2021 12:50 AM AEDT | By Kunal Sawhney

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Tomocredit To Offer Credit Cards to People with Poor or No Credit History

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Summary

TomoCredit is planning to offer credit cards to first-time borrowers with no credit history.

The company is backed by renowned angel investors along with world’s leading banking and financial institutions.

TomoCredit managed to raise $7 million in seed funding round to fuel the product development.

San Francisco-based start-up TomoCredit is looking to disrupt the market by offering a next-generation credit card to borrowers with no credit history. The credit card start-up is backed by Barclays and KB Investment and will offer credit card to new immigrants, international students and young adults in the US based on their income and cash flow stability in real-time basis.

Also read: UK Banks Looking to Increase Lending Rates on Credit Cards

TomoCredit managed to raise $7 million in seed funding round, which saw active participation from renowned angel investors along with leading banking and financial institutions that would help it in product designing and development.

The next-gen credit card shall help individuals to build their credit history. More than 30 million individuals have stable cash flows but are denied credit cards due to lack of credit history, and they end up using debit cards, according to the Consumer Financial Protection Bureau. TomoCredit aims to fill this gap and tap this opportunity to gain market share in this competitive segment. It is worth noting here that the founders of TomoCredit were immigrants themselves and struggled for credit despite being employed in the US. TomoCredit, which is Tomorrow’s Credit” in full was co-founded by South Korean immigrant Kristy Kim and Dmitry Kashlev, who is from Russia.

How it works

The credit card company has developed a model that is consumer friendly. The company generates its revenue from the cardholder’s spending and gets paid by the merchants. The company does not levy any hidden charges on the credit card holders.

The San Francisco-based fintech has joined hands with the member of the FDIC, Community Federal Savings Bank to issue credit cards. The credit card holders are supposed to make automatic payments on a seven-day payment schedule with an initial credit limit of $3,000, which goes up to maximum limit of $10,000. Weekly payment schedules shall help the consumers to build credit history faster. The reports to all the major credit bureaus.

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