New TomoCredit Mastercard does not require FICO or credit inquiry

The startup is using open banking through Finicity to offer assessment for folks without a credit history

Kristy Kim, the CEO of startup TomoCredit, told FinLedger as a young immigrant in her 20s, which was over 10 years ago, she didn’t have a credit score. She couldn’t access any credit products and it was hard for any lender to have a good financial understanding of her.

She was rejected five times for an auto loan, which led her to buy her first car using all cash. This is why she started up TomoCredit – and today teamed up with Mastercard to launch TomoCredit Mastercard that doesn’t require FICO, soft or hard inquiries to apply or open.

Instead, TomoCredit is using open banking through Mastercard company Finicity to offer a fast and proprietary assessment for people that don’t have credit history. Kim said it’s a great option for folks that are shying away from opening another credit card because they’re afraid of getting their credit score pulled or for people who don’t have a score.

“For them, they are getting rejected every day by traditional lenders. So it’s really refreshing for them, that we are willing to issue them a credit card without touching their score,” Kim said.

So far TomoCredit has pre-approved over 300,000 customers and plans to issue about 500,000 additional cards by the year’s end. The company aims to create an “open credit” environment to help the underserved.

Kim said this partnership helps TomoCredit to have more resources to execute, integrate and launch new features faster but it’s also mutually beneficial for TomoCredit and Finicity.

“Finicity data includes so many different types of data features that we can get from a user’s bank data,” Kim said. “Then we are leveraging it, and we are telling Finicity ‘Okay, we are doing X, Y, and Z and we want your data formatting to be this way.’ That way we can give them productive feedback. Eventually, more companies can easily leverage Finicity data to do their own cash flow data underwriting.”

Meanwhile, Sherri Haymond, Mastercard’s EVP, Digital Partnerships said in an email interview to FinLedger that Mastercard was excited to work with the startup given TomoCredit’s integration of open banking capabilities. And more specifically, that open banking “allows TomoCredit to access real-time data to improve risk assessment and decision making with a more holistic view of an applicant’s financial health.”

“We were able to connect TomoCredit with Finicity, the open banking platform we acquired in 2020, to offer rich data, analytics, and insights from more than 10,000 financial institutions,”Haymond said in the email interview. “Pairing these capabilities with the power of the Mastercard network, we are able to provide greater value based on TomoCredit’s specific needs and greatest opportunities.”

The Tomo Credit Mastercard has no fees, 0% APR and Mastercard is its exclusive card network.

A TomoCredit customer can get approved for a $100 to $10,000 credit limit after an application process that the company claims takes under two minutes. The company uses a proprietary underwriting system that analyzes more than 50,000 data attributes that include monthly income, savings, stock portfolio and spending patterns.

The startup was founded in 2019 and has 16 employees. Going forward, Kim wants to aggressively grow the company.

“Our focus is to grow as fast as possible, approve as many users as possible, and help as many people as possible,” she said.

In other recent payments news, Stripe raised a massive $600 million funding round at a $95 billion valuation. The B2B payments company announced on Sunday it will use the funding injection to invest in its European operations — in particular its Dublin headquarters — “support surging demand from enterprise heavyweights across Europe, and expand its Global Payments and Treasury Network,” according to the news release.

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