Mon · Aug 22

Nova Credit Lets People Transfer Their Credit History Between Countries

Nova Credit enables immigrants to import their credit history across borders to access better loans. If you’re coming to the US from overseas, US lenders can’t access your credit history from back home, so you’ll find it very hard to get any kind of credit. We sat down with Nicky Goulimis, Loek Janssen, and Misha Esipov to talk about how they’re changing the way immigrants access credit.

What YC Likes About Nova Credit:

“I find it incredible that the problem that Nova is solving has gone unaddressed for so long. Over 2 million people immigrate legally to the US every year, and every one of them starts over with zero credit, no matter how good their credit was in their home country. This is a huge missed opportunity for all the lenders that are missing out on these customers, and all of them will eventually use Nova to provide the solution."

Jared Friedman, Partner, Y Combinator

YC : How did you come up with this idea?

Misha: Our entire founding team emigrated to the US so we’ve all struggled with many iterations of this problem. It became really clear when our friends at business school ran into barriers that prevented them from accessing things like a phone plan or a credit card because they didn’t have any credit in the United States. We thought of bringing their credit score to the U.S. to help lenders make better decisions–that idea turned into Nova Credit.

YC : What were people doing before if they didn’t have credit?

Nicky: We’ve seen some duct tape solutions like building credit from zero and hoping to access the things you need as soon as possible. Some people open a trade line from their home country and pay a really high APR.

Immigration is really a vulnerable time period for individuals so their credit needs are even higher. If you’re moving to a new country you’ll probably need to lease a car and rent an apartment. If you don’t have credit you’ll have to pay a huge deposit so the need for a credit line is the actually most acute during immigration.

Misha: And it’s not just your average person who gets locked out either. A lender that worked with a lot of university students said that they had to reject a visiting faculty member from Harvard for a $1,000 credit line. If this is a problem for someone who is financially well off, imagine how hard it is for those who aren’t as financially secure.

YC : That sounds like a stressful scenario. How does Nova Credit change all that?

Misha: We’ve simplified the entire process of accessing international credit data. What happens right now is that a lot of immigrants will walk into a US lender and apply for a loan. Their application gets flagged because when the lender tries to pull up their credit report, the result is null.

When you log onto Nova Credit, you enter some demographic information and we’ll pull their credit data from overseas. We ping the APIs of our foreign credit partners and they send over their raw credit data. This data comes in different languages and formats so we’ll reformat and standardize it into a single, English credit report. From there, you can use our platform to look for the types of loans and credit lines that you need.

Nicky: There are two really cool things about what we’re doing. Grabbing credit data just by pinging an API sounds really easy but it’s actually quite difficult because of regulation around consumer data and how you move it overseas. So, the fact that we’re able to pull this data in a matter of seconds is pretty amazing. The second part is on the compliance side. We get data sources in many types, languages, regulation levels, and templates. Loek has been able to grab all this information and turn it into one standardized report called the Nova Credit Passport, which can be used by every single immigrant around the world.

YC : Can you expand on some of the challenges you faced around international policies and regulations?

Leok: On the regulatory side, there are a bunch of privacy standards around the world. For instance, the EU has one blanket policy across all industries and countries but the U.S. is the opposite. Its privacy policy is specific to each industry. Being able to merge and compare a policy between countries has not been easy. There are a lot of nuances and differences between these countries and navigating that has been challenging. However, we’re working with one of the lawyers involved in the creation of FCRA, the rules that governs all this, so we’ve got a good handle on it now.

YC : Why hasn’t anyone built this yet?

Misha: There are a few reasons. Immigration flows are higher than ever and will continue to grow. There’s also been a proliferation of credit bureaus. Fifteen years ago there were only 30 to 40 credit bureaus, but now there are more than 200. Every country has at least one because it supports a healthy and transparent consumer credit system.

YC : What’s your long-term vision for Nova Credit?

Misha: We want to become the world standard for cross-border credit reporting. If you want to move across any border, we’ll be the channel through which you port your credit history. We want to allow credit history to flow back to a home country, too. Eventually, we want to enable any individual going from one country to move their credit to another seamlessly. You should be able to route information from India through us into the UK and then all the way back.

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