This Berkeley Grad Was Denied a Loan 5 Times. So She Decided to Disrupt the Credit Industry

As a debt-free graduate of UC Berkeley with a six-figure income, Kristy Kim, 33, did not expect to be rejected five times for an auto loan. The South Korean immigrant had never heard about the FICO score, which judges a person’s creditworthiness based on several factors, including credit history. To challenge what she saw as an outdated credit bureau system, Kim founded San Francisco-based TomoCredit in 2019 to offer credit cards to immigrants and young adults who don’t have satisfying credit scores, and in just one year landed on Inc.’s 2020 Female Founders list. Since that year, TomoCredit revenue has grown 10 times, with over 2 million dollars in 2021 revenue, up from $200,000 in 2020. Here’s how she did it. –As told to Xintian Tina Wang

I came to the States when I was 11. As a first-generation immigrant from South Korea, my culture taught me to spend within my limits, so I used my debit card all the time. Asian culture does not encourage you to borrow money, but here in the United States, the credit system needs you to borrow to show that you are a worthwhile borrower. It’s better to use a credit card earlier so you can build the perfect 850 credit score fast.

In 2012, I was working in investment banking after I graduated from UC Berkeley, but I had no idea how to take care of my personal finances. I wanted to buy a car, so I applied for an auto loan. To my surprise, I got rejected five times because I don’t have a satisfying credit score as an immigrant. A perfect credit score is not something you can get overnight. It takes years to build it, so I had to buy my first car with cash to “fit in” to the American credit system.

At that time, I thought I was stupid and I should’ve known about building credit earlier, but after I met more immigrant employees at work who ran into the same issue, I realized how outdated the credit system is in the U.S., and that we needed a solution to help immigrants and young adults get credit cards and mortgage loans without a perfect credit score.

When I founded TomoCredit in 2019, I wanted to help millions of people like me. However, launching an unsecured credit product is much more difficult than launching a debit card product. I scared everyone — including investors and partners — when I told them I wanted to create a credit card that ignores credit scores. It had never been done before.

Our product works by using real-time banking data and mobile banking to determine your credit. Customers can simply share their bank accounts with us on the app, so we can read when you opened the account, how long you’ve had it, and how much money it contains. You can also add your crypto account or stockbroker account to show how much your investments are worth. 

To my surprise, without any marketing, we got more than 20,000 people signing up for our credit card within the first day of launching. I realized what we built was not just for immigrants and young people but also for anyone in the U.S. who is not satisfied with their credit score.

I also noticed there are a lot of undergrads who do not know how to take care of their personal finances, so we launched an ambassador program in top universities like Harvard and Stanford two years ago to help young adults to build credit. I asked a class of undergraduate students at UC Berkeley, “How many people here have got a credit score over 650?” There were only five people who raised their hands. We’re different from legacy banking companies because we do care about building your credit score with zero interest rate and no fees.

In the long run, I want to grow my team and hire more diverse talents who truly understand the struggles of getting credit access. Right now, 95 percent of our 50 employees are people of color, and more than 90 percent of our users are people of color. So I am proud that my employees understand our users really well. To top it all off, our customers are more creditworthy than the industry average. When it comes to numbers, the industry average credit card loan-level loss rate — the percentage of charge off credit card balance to the total amount of credit outstanding — is 2.5 percent, while our loss rate is 0.11 percent.