When Kristy Kim graduated from UC Berkeley in 2011, she needed a car to commute to Palo Alto for a finance job. But like many young people and recent immigrants, Kim had no credit history and couldn’t get approved for a loan to purchase a car.
Kim ended up borrowing cash from family to buy a car, but the problem of not having access to credit kept nagging her.
“It was the first time I realized that, if you do not have a credit score, by default, banks think you are bad with credit,” said Kim, who is now pursuing her MBA at the Haas School of Business.
So, last year, as a graduate student, Kim co-founded her own credit card company, TomoCredit, short for Tomorrow’s Credit, to provide credit cards to people who don’t have a credit score and cannot get approved for credit by bigger banks.
The startup, which employs four other immigrants who come from countries around the world, has raised more than $3 million and has over 15,000 people signed up to use their credit cards. Kim said she owes much of the company’s success to her Berkeley education.
“Berkeley is where I first got that entrepreneurship bug,” said Kim. “I got to learn from real entrepreneurs who came from outside of the university and shared their knowledge with us. The business community and courses offered here really helped me understand what the expectations are to run my own company.”
One of those courses, a blockchain and cryptoeconomics course taught by Berkeley Haas professor Gregory La Blanc, was a catalyst for creating TomoCredit’s business model.
Kim spoke as an alumna guest lecturer in La Blanc’s class in the summer of 2018 and surveyed students about their experiences accessing credit.
The data Kim collected served as market research she then used to understand the trends and real demand that a product like TomoCredit could fulfill for college-aged students.
“Kristy has gone full circle here at Berkeley,’” said Berkeley Haas professor Kurt Beyer, who taught Kim as an undergraduate in his entrepreneurship and innovation course. “She is now a guest speaker in my graduate entrepreneurship class. I always knew that she would be a successful entrepreneur. I think it has a lot to do with her immigrant background and perseverance.”
The right thing to do
Kim started out trying to understand 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 met senior executives and told them there are more than 30 million users with this problem, including 53% of college students who do not have a credit score right now,” Kim recalled. “They were all aware of this, but they weren’t willing to expose themselves to failing regulatory tests.”
That was TomoCredit’s opening. The company provides 0% interest 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 unique underwriting policy gives TomoCredit an opportunity to disrupt the typical credit bureau system and to extend credit to many consumers who are financially responsible, but can’t access traditional credit systems, said Kim.
“When all these big banks and these big players were saying, ‘No, that’s not possible,’ Kristy refused to listen to that,” said Rhonda Shrader, executive director of the Berkeley Haas Entrepreneurship Program. “She found an elegant way to solve a large, urgent problem.”
As someone who grew up in South Korea and came to America when she was 11, Kim said helping immigrants without a credit score is 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 courses to focus on running TomoCredit. She hopes to return to school in the near future.
“Companies can copy us, but we will just try our best to execute faster and be more innovative,” said Kim. “Those are traits, as an entrepreneur and student, that Berkeley has instilled in me.”