With non-US-born residents making up nearly 15% of the US population, establishing credit is often a big challenge for these new immigrants, many of whom have excellent credit records in their home countries. It’s also a challenge for lenders who are keen to offer services to this substantial market.
A new business and technology partnership formed by identity verification firm Mitek and fintech Nova Credit could enable US immigrants and ex-pats to use their home country credit history to help establish US credit in just minutes as opposed to years.
Lenders are often challenged by strict know your customer (KYC) rules but technology can provide a faster path to a US credit history for both immigrants and lenders.
US credit history a challenge
Recent data from Pew Research Center shows the US foreign-born population reached a record 44.8 million in 2018 and there are now almost 15 million temporary or permanent legal residents living in the country. think
These individuals are over-represented among the “credit invisible” population, who often face an uphill battle to access products and services in the US despite having a well-established financial history in their home country.
“As a dual citizen who was once an immigrant to the US myself, I know firsthand how intimidating it can be to create a new life in a new country,” says Mitek Vice President Cindy White. “I’m inspired by Nova Credit’s solution and thrilled that Mitek can help newcomers more easily verify their identity so that they can establish credit to open accounts, ensuring trust and convenience for all.”
International data and digital identity verification combined
Financial technology firm Nova Credit gathers international credit data and translates it into a US-equivalent score and report familiar to select American underwriters, who use it to evaluate applications for credit products.
Nova Credit creates a FICO-equivalent score, tradelines, and inquiry history, allowing new US residents to verify their creditworthiness to lenders and partners like American Express, MPOWER Financing, and Yardi who can seamlessly underwrite qualifying newcomers without a US credit score using Nova Credit.
By integrating Mitek’s Mobile Verify® identity verification technology into its system, Nova Credit also helps lenders to identify and reduce risk to comply with the latest US KYC regulations. Using the Nova Credit mobile-first system with Mitek’s Mobile Verify, an applicant can easily verify their identity on their smartphone by submitting a photo of their government-issued ID and selfie, enabling lenders to quickly and reliably analyze these applications to prevent fraud.
“The world has become more interconnected than ever, yet financial institutions still find it difficult to access and verify consumer’s data when they move countries,” says Nova Credit CEO Misha Esipov. “Our new partnership with Mitek not only makes it easier for newcomers to apply for these products online, it also simplifies KYC requirements for banks.”
Mitek’s Mobile Verify® is a next-generation digital identity verification service designed for the world’s leading marketplace and sharing platforms, banks, and financial services organizations. Mitek uses hundreds of AI-based analytics, computer vision algorithms, and biometric facial comparison for a layered approach to identity document verification combining smart automation with the expertise of forensic agents for a fast, accurate way to verify the identities of consumers.
With this new verification and international data partnership, new immigrants could establish a valid US credit history in minutes through a simple mobile application instead of building a credit history from scratch which traditionally can take as long as five years.
Headquartered in San Diego and with offices across the US and in Europe, Mitek now provides identity verification, mobile deposit, new account opening, and other services to more than 7,500 financial industry partners around the world. it recently provided its solution free of charge to help Gift Card Bank quickly and accurately verify the identities of individuals requesting support, protecting against potential fraud attempts by scammers who file fraudulent donation requests, particularly during the COVID-19 crisis.
Started in 2015 as a graduate research project at Stanford University, and launched in 2016, San Francisco-headquartered Nova Credit gathers data from partners in credit bureaus in Australia, Brazil, Canada, India, Mexico, Nigeria, South Korea, and the UK with plans to expand to China, Jamaica, and Kenya in the near future.
In February 2020, Nova Credit completed a new $50 million financing round from investors led by Kleiner Perkins, and Canapi Ventures, as well as previous backers including Index Ventures, General Catalyst, and Nyca Partners. Ashton Kutcher and Guy Oseary’s fund Sound Ventures also invested along with baseball legend Alex Rodriguez and U2 guitarist the Edge.
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