When people move to the U.S., either permanently or on a temporary visa, they often leave behind their established credit histories. That can make starting up their lives in the States expensive and difficult.
"You come here and then the financial services sector shuts you out," says Misha Esipov. He's the CEO of Nova Credit, a company he founded in 2015 with two of his former classmates at Stanford University to address this issue.
"If you go to any major graduate program, half of the students are foreign, and 100 percent of that half will tell you the same narrative about how they can't get a credit card, an apartment lease, a cell phone plan, a student loan," says Esipov, now 30.
Esipov moved to the U.S. from Russia when he was 3 years old. COO Nicky Goulimis is English and CTO Loek Janssen is Dutch and, while both had proven, back home, that they were reliable borrowers, U.S. lenders couldn't access that information.
"It's not because banks are bad, or because these big credit bureaus are evil and discriminating against immigrants. It's that nobody had actually figured out how to solve this really complex technology problem of letting people move their information around the world with them," says Esipov.
That's where Nova comes in. The company's mission is to equip anyone coming to the U.S. with a financial identity that spans borders — a kind of "credit passport."
Nova serves consumers by connecting foreign credit bureaus with the major credit bureaus in the U.S. — Experian, Equifax and TransUnion — as well as lenders. It partners with the student loan company Mpower, the property management software company Yardi, and large financial institutions.
"We create a win-win-win," says Esipov. "It's a win for the bureaus because they're able to serve customers overseas. It's a win for banks because they're able to acquire consumers that they otherwise can't serve. And it's a win for consumers because they're able to access the services that they otherwise can't. "
Experian, Equifax and TransUnion did not respond to request for, or refused to, comment.
Nova is free for consumers, and it's now available to people headed to the U.S. from over a dozen countries, including India, Mexico, Canada, the U.K. and Australia.
Citing data from the U.S. State Department, Esipov estimates that roughly 2.5 million immigrants coming to the U.S. every year could benefit from this service. Accounting for all the countries the company has partnered with, Nova is available to nearly 60 percent of those incomers. One day, he hopes, it could help them all.
"One of the most important things for our business is continuing to increase that number to get it as close to 100 [percent] as possible," says Esipov, and the company now has nearly $20 million in funding to support that mission.
Nova also serves American citizens who travel overseas for years and don't maintain American bank or credit accounts, as well as undocumented immigrants.
Company team photo, courtesy of Nova Credit
"Regardless of your citizenship status whether you're here legally, illegally on a work visa, on a non-work visa, for immigration, not for immigration," says Esipov, "if information exists in your home country, we give you the ability to move that into your new country so that you can land on your feet."
Basically, he says, "we want to help anyone who's in the pursuit of opportunity."
Your credit history can give a bank a reason to trust you, which can make life easier and save you money. Without established credit, though, you might be disqualified from some jobs and some financial services. You might have to pay large security deposits for apartments and high insurance rates. And you won't have access to the best credit cards or competitive loan rates.
When it comes to paying off your mortgage, NerdWallet found that an excellent FICO credit score (750 or higher), which is a reflection of a strong credit report, will save you more than $10,000 in interest over 30 years, compared to a score that's considered decent (680).
"The ability to actually come into the country with a great representative credit history allows you to save hundreds of dollars each month," says Esipov.
If you don't have an established credit history back home, or if you're from a country that Nova has not yet begun working with, you can access affordable loans through some credit bureaus, as well as companies like Oportun.
You can also try getting a credit card from the start-up Petal, which serves consumers with little credit history, or a major credit card issuer as long as you can afford to put down some money upfront. Secured cards require a deposit that usually matches your line of credit. If you pay of your bills on time and keep your utilization low, you can use a secured card to build up your credit in two or three years.
However, if you're moving to the U.S. and you've already proven to a lender back home that you can handle credit responsibly, you could benefit from using a service like Nova's.
"It's ridiculous that it's you know it's 2018 we're talking about putting people on Mars and like this problem still exists," says Esipov. "It's one that technology and partnerships can, and have, solved — and that's exactly what we're working on."
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