Nova Credit: Challenging a System Built on Wealth

About 10% of Americans do not have any credit record and are therefore considered credit invisible. This equates to 26 million consumers in the United States who are severely disadvantaged when it comes to borrowing money, buying insurance, and many other financial activities. Credit is a necessary part of social mobility anywhere in the world. With low credit, consumers are charged higher rates on insurance and may face more difficulty renting apartments. Additionally, the ability to receive mortgages enables lower-income individuals to own property, which can serve as a gateway to greater success and wealth.

Founded in 2016 by Misha Esipov, along with a team, Nova Credit sought to make it easier for non-Americans to demonstrate their reliability as consumers through credit. This mission stemmed from credit-related challenges they all faced as non-Americans who moved to the U.S. They offer multiple products aimed at addressing the credit imbalance that non-Americans face. The most popular product is the Credit Passport, which allows users to transfer their credit history from their home country to the United States. As mentioned previously, the Credit Passport gives immigrants one less thing to worry about in the titanic task of immigration.

Not only is Nova Credit in the consumer market, but they also sell products to businesses. One of their business-facing products is Cash Atlas, a system that goes beyond traditional credit data to provide more accurate risk analysis on loan applicants. A product like this greatly aids many people who lack a financial history but are not moving out of their country of residence. It can be a fundamental factor in combating the wealth gap. In the United States specifically, Black and Hispanic consumers are 67% more likely to be credit invisible compared to White consumers. If lenders and financial institutions all used Nova Credit, this disparity could be significantly reduced. It is important to note that these systems of inequality are present worldwide, and Nova Credit has the potential to help dismantle generational economic issues.

With Cash Atlas, Nova Credit has made major progress through a recent expansion of its multi-year relationship with SoFi, an online personal finance company. They have used cash flow analytics and consumer-permissioned bank data through Cash Atlas to serve more consumers and improve credit eligibility. The partnership between SoFi and Nova Credit is especially impactful since SoFi is an online-only bank. This innovative approach to banking gives SoFi a greatly expanded reach, even transcending borders without the need to open physical locations in new countries. SoFi is another strong addition to Nova Credit’s list of partners and a key stepping stone

toward future opportunities.

Works Cited:

https://www.nerdwallet.com/article/finance/what-is-credit https://www.novacredit.com/company https://www.consumerfinance.gov/about-us/newsroom/cfpb-report-finds-26-million-consumers-are-credit-invisible/#:~:text=The%20report%20found%20that%3A,records%20that%20can%20be%20scored. https://www.businesswire.com/news/home/20241015074724/en/Nova-Credit-and-SoFi-Expand-Multi-Year-Relationship-with-Cash-Flow-Underwriting-Capabilities https://research.contrary.com/company/nova-credit