Last updated on August 22nd, 2022
The TomoCredit Card offers a unique approach for establishing credit. The fintech credit card avoids credit scores or credit history and instead uses a proprietary formula to gauge creditworthiness. The result is an easier entry into credit for immigrants, students, and other young adults. The company recently announced a new series of fundraising, with over $7 million in new capital from a variety of investors, including venture capitalist firms and Barclays Bank.
TomoCredit Card a New Approach at Building Credit
TomoCredit, a fintech startup, is seeking to change the way people build credit. The company, founded in 2019 by two foreign-born entrepreneurs, hopes to create a solution for other foreign-born individuals and young adults facing challenges getting approved for credit cards, loans, or other lending products.
TomoCredit is a unique credit card issued by FDIC member bank, Community Federal Savings Bank. The card operates under a debit payment system. Users make payments on a weekly automated payment schedule. This allows for no fees or purchase APR.
According to TomoCredit, the average credit limit is around $3,000, with a maximum credit line of $10,000. Borrowers can also link to their investment accounts to increase their credit limits.
“Leverage Different Data Instead of Credit History”
“It doesn’t matter whether you have income or savings or not,” TomoCredit CEO and co-founder, Kristy Kim, told TechCrunch. “I thought it would be really nice if we could leverage different data sources, especially cash flow data, instead of credit history. We are living in 2021, and open banking is popular, so it’s easier to get access to open banking data. And we leverage your cash flow data to underwrite you.”
“Unlike incumbent credit card issuers, we aren’t incentivized by slapping fees on borrowers for making late payments — we make money as our cardholders spend — so we grow as you grow,” she added.
TomoCredit Fintech Card Raises $7 Million In Seed Funding
Earlier this week, TomoCredit announced $7 million in seed funding through a variety of new investors. The impressive list includes KB Investment, Kookmin Bank – a South Korean consumer bank subsidiary, BAM Ventures, Passport Capital, Ulu Strong Ventures, and Barclays Bank.
Mariquit Corcoran, group chief innovation officer at Barclays, told TechCrunch that Kristy Kim’s, “tenacity and passion” impressed her immensely. “I look forward to watching their growth and impact in changing the way an individual’s creditworthiness is determined,” she told the site via email.
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