I’m Kristy Kim and 3 years ago I started TomoCredit to build credit for millions through a No-Credit Check, No Fee credit card. Since then, I’ve raised $122 million in VC funding and have helped countless build their credit. AMA!

As someone who worked for a big bank that serviced CC's for hundreds of smaller banks, I'm not seeing how this can be profitable long term.

Are you also charging interest on the cards as well? Your website says 0% APR. I just don't see how the risk of having people stop paying their bill can be countered by collecting small interchange fees.

It definitely feels like the end goal is to be an acquisition target for a larger bank/fintech.

End goal is more ambitious :) we want to unlock auto loans and mortgages as well. so we make the credit score obsolete in the next 10 years. think of yellow cab. who is using it? ppl use uber now. once lenders realize that they can underwrite without FICO, we will not go back to the old FICO system.

It's an interesting comparison. Would you say your company has a similar ethos to Uber? They got big by operating a business illegally, hoping that doing so would convince legislators to change the law. FICO isn't itself a governmental creation, there's nothing wrong with disrupting it. But you're operating in a sector with even more regulatory oversight than public vehicles. That legal framework isn't designed to just protect incumbents, it's also for consumers and third parties. I hope you're respecting the law-based aspects of the consumer lending market.

I did not say similar ethos. It was an example to show Legacy business model VS new business model. If you don't like uber, I can use another example for ya. Filing tax on paper VS turbotax. Riding horse vs Car. Flip phone vs Iphone.

horrible analogy. Over used as well. "We'll be the uber of ___." So you'll be unprofitable for decades?

ok guys. i hear you. didn't know that you guys are sensitive to uber. how about Filing a tax on paper VS Turbotax analogy. do you like it better?

So you're offering a free service to collect people's private information to resell it or offer them premium services they don't need (which is TurboTax's model).

The question, how is your service profitable or breaking even (and if the latter, why is it not a non-profit). I can open a credit card, spend it, you won't report me, that's awesome, I'll open one today. Or you are lying and you are just another "0% APR until you stop paying, then we jack up your rates".

If this doesn’t get a response , it is like likely they are selling your personal information in order to do this long term

We do not sell data. PERIOD

Thought I replied to this...

We do not sell data. PERIOD

Oh i have a better one, Robinhood vs Charles Schwab. They have the same core feature, but Robinhood dominated the GenZ/ Millennials market

Uber sucks though.

yeah. sorry for the bad choice of analogy. Robinhood vs Charles Schwab// Venmo vs sending check---- this would have been better

that serviced CC's for hundreds of smaller banks, I'm not seeing how this can be profitable long term.

Are you also charging interest on the cards as well? Your website says 0% APR. I just don't see how the risk of having people stop paying their bill can be countered by collecting small interchange fees.

Hi! Which bank did you work at? :) We charge NO APR. The business model is debit card model--- meaning that we only make money from interchange revenue from merchants. NO APR. NO FEES. TomoCredit is the cleanest credit card you could ever get. I built this since this is exactly what I needed in my 20s when I was building credit.

According to the site you can’t carry a balance without the card getting locked. What good does that do when the average person can’t come up with $400 for an emergency? I use my card, don’t have the full $400 and now I can’t use it again? Like others point out I just don’t see the sustainability of this model long term.

It literally exists for people who have the means but no credit score to build their credit lol. They're not offering help in your tight financial situation, they're giving people who are financially responsible with low/no credit to (re)build credit.

According to the site you can’t carry a balance without the card getting locked. What good does that do when the avera

Fair point. Tomo is not designed for emergency loans. We can look into offering more features as we mature. for now, think of us as a better version of debit card so you only get to spend the money you can afford to pay back shortly

Get bought out and/or selling customer data.

we are not selling customer data, as we want to keep it uniquely to tomocredit to further develop Tomo's own auto loan and mortgage underwriting! so you can get approved for tomo card, tomo auto loan, mortgage at the best rate you deserve without a credit score!

You want to lend 200k+ for a mortgage to people that don't have credit? This screams 2008 financial crisis.

There is a reason lenders check an applicant's credit before they lend them money.

what if you are an immigrant and have no score? or international students who left home to study in the U.S.?

If someone has paid rent for 10 years they can pay a mortgage regardless of credit score

what if the rent was not reported to the credit bureau? many landlords don't bother to report. and still many renters use check......!

I mean, not necessarily. Where I'm from only about half the people have a credit card at all, and most don't even use it. I think we also don't do those credit scores, but I'm not certain since I don't have a credit card.

good point. even in my home country, south korea, people don't care much of credit scores, because on average, everyone have good score. U.S. is unique in a way that "you need to prove that you are credit worthy". without a borrowing history in the U.S. , you have no score in the U.S. and lenders think you are terrible.

No idea if this is how they do it but when I was younger I had bad credit from a few missed student loan payments and no other credit history. So I had to get a cash backed credit card. It was a credit card for the purpose of building credit without a cosigner but the credit line was how ever large a deposit I wanted to give the bank. So maybe the work like that where if you fail to pay they have your money already, which also allows them to invest everyone's money in the market.

rd. It was a credit card for the purpose of building credit without a cosigner but the credit line was how ever large a deposit I wanted to give the bank. So maybe the work like that where if you fail to pay they have your money already, which also allows them to invest everyone's money in the market.

Good point!!!!! It is so not true that people without credit score are bad. I hate that stereotype. Most of immigrants and international students have no credit score in the U.S. but they are hard working for their American Dream! they deserve a shot. I am so proud that Tomo is the brand that stands by them

How does your company profit?

hi! first question. woohoo. we make money from merchants. Not from customers. ex) you buy starbucks coffee with TomoCredit card-- starbucks pays tomocredit a tiny cut of the coffee purchase like 2%. You pay nothing. In the industry, it is called "Credit Card Interchange Revenue". Most ppl dont know, but whenever you swipe your debit card or credit card, merchants are always paying interchange fees to the card companies in the background

That's how a lot of cards (all?) make money. And then they add interest and annual fees. How do you make profit, while targeting a riskier consumer segment, and not charging those things?

This is like saying you are starting a walmart competitor with lower prices, and you make money because when people buy things they pay for them.

Don't need profit while getting VC funded!

But realistically, it's likely a similar play to Sofi and other fintechs trying to use alternative ways of analyzing risk. They use stuff like income/which college you went to/your college degree/etc. Upstart is a good example of a company dedicated solely to risk.

Tomo ain't here to approve literally anyone. You don't need a credit history, but you still need to match their acceptable risk profile.

hs trying to use alternative ways of analyzing risk. They use stuff like income/which college you went to/your college degree/etc. Upstart is a good example of a company dedicated solely to risk.

Tomo ain't here to approve literally anyone. You don't need a credit history, but you still need to match their acceptable risk profile.

Hey you nailed it!!!!!!!!!!! We have built our own AI risk model. we use that instead of FICO. our model is proven to be more inclusive as we can approve people with no credit history in the U.S.

It also looks like they require the balance to be paid off weekly via automated bank debit.

That's actually probably a good habit builder to pay off the balance monthly once people move to other credit cards.

Yes. it was intentionally designed that way to help people boost their credit score fast by paying off their credit card balance more frequently!

all other credit card companies (*except tomo) make money on three things- Membership fees, APR, Interchange fees (sometimes + late fees, foreign transaction fees etc)

It sounds like they assess subjectively and weight their decisions based on ability to pay rather than history. Maybe their data is showing it's not that big of a discrepancy in profitability and they have access to a decent market they can be aggressive in, hence the no fees and 0 apr. Obviously they aren't the first but I'm also curious what kind of numbers they're projecting.

Totally. A huge market of people with stable cash flow and good habits but happen to have no credit history”

From their website: “ * Credit limit of $10,000 can be achieved over time and by maintaining an average daily balance in excess of $40,000”

So basically, the people using the card don’t actually need the credit, they just need access. It’s almost impossible for tomo to be screwed by their users due to the requirement to have more money deposited then can be pulled out.

Keeping this in mind, they are able to make small profit via interchange fees.

I think they will eventually find out, however, that the market for minorities/immigrants that have this much cash available, and also need credit badly, is a very very small market

So this is for people who have $40k spare and want a credit card but can't get one because they don't have any credit history?

That seems... odd.

I'm pretty sure they don't need to have 40k to start that's the upper limit. For some people putting in 1k for $250 limit to start building credit can go a long ways

You are right in a way that Tomo AI logic looks at dynamic aspects, not just cash balance. and you can start at $500 and go up to $5000 or $10,000 shortly depending on the model

It has some automated systems that make it easier to build credit fast and to help dumb people that are unable to stop themselves from bingeing on credit (automated debit-like system that still allows access to "credit card only" functionality).

The market for Tomo seems to be very small though, yea.

you are right on the first part in a way that we make credit building so seamless (i would not call users dumb though! it is just too much hassle to be on top of your score all the time especially when you are busy with your school or work for your goals). Second part about the market size, it was small in the past but it is growing over 10% year over year in the past decade. Now 80% of college campus have no credit score and Tomo is perfect for them

Another way to do that is to try to get a "secured" credit card but not sure whether this is available in the USA

correct. it is avail in the U.S. but they give out the small limit and you need to de*deposit cash- thats why it is called "secured" credit card. With tomo, no need to deposit cash

Why do you think this was an attractive investment for venture capitalists? It seems like a lower profit, riskier model than traditional credit

since it opens up a huge market of "credit invisible" population of 40 million in the U.S. Untapped market, big opportunity

How do you determine the credit limit one gets? Does everyone get 10k from the start?

We built our AI model, so it determines your risk based on your unique profile without credit score

What rate of default do you have compared to traditional creditors?

way lower than the industry average so far. (2.5% AMEX vs 0.1% TomoCredit) this proves that no-FICO underwriting is not risky as ppl thought. Challenging the status quo 🔥☺️

Does your card build credit score/history?

Yes, just like any other credit card!

Does TomoCredit currently have plans to expand beyond the USA?

We are discussing, but tbd. for now, we are heads down focused to help immigrants, students, young professionals, business owners in the U.S.

How do I safely check my credit score without affecting my credit score?

(I'm newish to the USA and it's surprisingly hard to get a definitive straight answer!)

Good news. Tomo can show your credit score on tomo dashboard for free! we are launching this now as we speak

I know I'm very late and the AMA has likely ended, so I understand if this goes un-answered.

In your opinion, what makes your company a fintech company vs. just a finance company?

Amazing question! In my humble view, fintech company is totally different from finance company in two main areas. First, fintech company has tech DNA versus profit DNA. I worked at investment bank M&A (a finance company) and it was all about top line/ bottom line/ revenue multiple etc. It has nothing to with mission or pain points that the company is solving Secondly, company culture. At fintech product and engineering have a huge influence! versus a finance company, they treat engineering as task fillers (or even worse, like IT)

now I'm very late and the AMA has likely ended, so I understand if this goes un-answered.

We are still going :)

Why is it a world elite card?

Meaning that MasterCard approved us as their top tier partner! MasterCard only select a fintech to give out world elite status 🌎

You don't pull credit to get a card but do you report to credit?

reporting is a free service we offer to help you boost your credit score.

I'm a regular user of Tomo! Love the card! What are some new features coming down the road?

ahh so happy to hear :) so many new features are in the pipeline, to start with, we just launched the credit score monitoring feature on your dashboard, so you can monitor your score going up without leaving tomo site. And we are adding crypto features as optional features in case you have decent assets in crypto and want to leverage that data to increase your credit limit.

Isn't the core issue the lack of an alternative 'credit score'?

I would say the core issue is how legacy FICO system failed to keep up with the new consumer behaviors. That resulted in millions of people including myself in my 20s getting rejected from any loan products (also not being able to rent apartment, rent a car etc)

Might be late but on your site there's this chart and there's a checkmark under Tomo for "Rewards"

What rewards would that be?

$60 Lyft Credits
$60 DoorDash Credits
$1,000 Cellphone protection & more...

Check out:

https://tomocredit.com/

Do you still user data?

No user data is sold or shared with 3rd parties.

I’m going to presume a lot of these trolls haven’t raised any $ for a business let alone over $122M! Congrats on the raise!

My question: What’s the market size of your current niche? Is your ambition to capture this niche and be a category killer or branch out?

Thank you!! our ambition is def to branch out to more products ex) auto loan, mortgages. In that way our customers can enjoy the best rate and service without having the hassle to build a credit score and waste time in between!

Hi Kristy, no question but just wanna say you are handling these AmA super well! Exploring almost all threads and replying wherever you think is required and however deep the thread. Thanks for all the effort!

Also, there's a version of TomoCredit where I am from. It's called Slice from India. Extremely similar business model. And a really well designed UI/UX experience if I might add. It was one of the first cards to cater towards students. Do check it out. It might become your competitor one day :p. Also just gonna add a question here at the end so that this comment doesn't get flagged, it's a valid proper question, dw. What are your views on international expansion and international competition?

Thank you!! I did hear about Slice from one of investors- heard that they are growing fast but also spending a lot in marketing (which was perfect for 2021, but not much in 2022 😅). Now we are focused on the U.S market. and we will remain opportunistic for other countries :)

Im looking for a remote sales job, will you interview me?

so sorry. we dont have sales roles yet.. we will post on our site once roles open up :)

Hi Kristy, I actually saw your name and TomoCredit come up on one of the FinTech newsletters this week so it's great to see you here.

As you potentially expand to different financial product offerings (like mortgage, automobile, etc), are you confident that not using credit check will be enough for your underwriting capabilities? How do you account for "willingness to pay" metric without using credit scores?

d to different financial product offerings (like mortgage, automobile, e

Thank you for your thoughtful question. When I was first starting out, so many skeptics told me that it is dangerous to approve people without a credit score. But as a female immigrant from South Korea, I knew that there are tons of people like me out there- NO SCORE BUT GOOD PEOPLE. We ignored the skeptics and powered through our launch. The result was phenomenal. Indeed there were tons of good people who wanted to build credit the clean way (no deposit, no APR. no fees) and they came to Tomo. we saw 20,000+ sign ups organically soon after launch

Why don't you focus more on grammar? In particular, you seem to forget to use capital letters properly, use a LOT exclamation marks directly after eachother, and use quite some informal acronyms (e.g. "ppl", or "cuz").

It seems like an easy way to appear more professional.

thank you for the feedback. i was writing super fast