This Immigrant Couldn't Get an Apartment Because She Was a 'Credit Ghost.' Today, Her $20 Million a Year Startup Helps Others Build Their Credit
In 2011, Kristy Kim thought she was living the American dream. Fresh out of UC Berkeley and starting a career in investment banking in San Francisco, the 22-year-old was eager to find her first apartment, but her rental applications kept getting rejected. "It was a lot of struggle... because, here is me, who studied hard, who worked hard to get a job and make money, and realizing that: 'Oh, I don't have a credit score in the U.S., I am credit invisible — a credit ghost,'" Kim told CNBC Make It.
Kim had immigrated to the United States from South Korea by herself at age 11. Without any family members to help her navigate the country's credit system, she was forced to get creative. She resorted to going on Craigslist, where she found an apartment she liked and reached out to the landlord directly. "I basically pitched him: 'Hey, I don't have a credit score, but trust me, I have a job and I can have you talk to my boss [and] my boss can vouch for me,'" said Kim. Her plan was successful, and Kim secured her first apartment.
Those early struggles with adapting to the U.S. financial system stuck with Kim. Today, at 38 years old, she is the co-founder and CEO of TomoCredit — "tomo" short for tomorrow — a San Francisco-based fintech startup that helps people, especially those with limited credit history, build their credit and improve their personal finances. Last year, Kim's company brought in more than $20 million, according to documents reviewed by CNBC Make It.
The Breaking Point: Buying Her First Car
The turning point came not with housing but with buying her first car. After moving into her apartment, Kim wanted to take out an auto loan. After multiple rejections from the auto dealership, Kim had to get creative again. So, she walked into her local Citibank branch and asked if the manager could vouch for her, given that the bank had records showing her salary and savings.
“I requested a meeting with the manager ... Basically, I asked her, can you call the auto loan dealership ... and then tell them that I'm a [trustworthy] person ... You guys can see how much money I make,” said Kim. “But she said that it doesn't work like that. She is not allowed to vouch for me ... [their] banking department and lending department are separate ... so they cannot communicate with each other,” said Kim.
“So that's my 'aha' moment that I realized the system is very archaic,” said Kim. In the end, she had to borrow some money from her family back in Korea to buy a used car in full. Through this experience, Kim says she learned that the U.S. credit and banking system were very inefficient. “It was a lose-lose for everybody. Lose for the auto dealership, because they couldn't make the sale. Lose for me [because] I had to spend so much cash. And it's not so great for [the bank] either, because they couldn't keep me, their customer, happy,” said Kim.
A Solution Born from Struggle
“That's why I started Tomo with full confidence. [I knew] that there should be millions of Kristy's out there who had this bad experience,” she said. “I think somebody had to build this.” As someone who moved to the U.S. on her own, Kim didn't have any family members to help her navigate the country's credit system.
“I want people, especially immigrants [to] feel empowered, instead of being ashamed, because not having a credit score ... was not something I should be ashamed about. That's simply because I didn't know the system,” said Kim. Today, TomoCredit offers a solution for those who face similar challenges.
Tips from Kristy: Building Your Credit
Kim built TomoCredit for her younger self. She shared two key tips for building your credit for newbies:
- Learn about how credit scores work and find out what your score is as young as possible.
- Start small by borrowing small amounts of money from the bank that you know you can pay back with ease. Whether it's $100 or $1,000, showing a history that you can take a loan and pay it back will help build your credit, said Kim.
"So start small and early. I think that's the best hack," she said.
Learn More About TomoCredit and How to Build Your Credit
If you're looking to improve your personal finances or want to learn more about how credit scores work, check out TomoCredit's resources on their website. You can also sign up for Smarter by CNBC Make It's new online course, How to Build a Standout Personal Brand: Online, In Person, and At Work. Learn from three expert instructors how to showcase your skills, build a stellar reputation, and create a digital presence that AI can't replicate.