Nova Credit Review: International Credit for Immigrants
Immigrants and international students often struggle to gain access to financial services in the United States. Nova Credit aims to end that by providing a “Credit Passport®.” By connecting foreign credit bureaus with lenders and major U.S. credit bureaus, lenders can better serve people from abroad.
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Nova Credit was created with the mission of helping to build a world that goes beyond borders. The company hopes to facilitate global credit migration, so that people who come to the U.S. have a chance to participate in, contribute to, and support the U.S. economy.
Nova Credit is a unique service that aims to help U.S.-based companies better serve immigrants and international students who need to access credit in the United States. By making foreign credit reports accessible to U.S. financial institutions and credit reporting agencies, immigrants can bring their credit history with them, so they can more easily access the credit they need to start their lives in this country. Nova Credit can also help U.S. citizens who want to take their credit history with them when they go abroad.
This Nova Credit review will cover the pros and cons of the service, so you can decide if it’s right for you.
In this review:
- Understanding How Nova Credit Works
- Advantages of Nova Credit
- Downsides to Nova Credit
- Nova Credit’s Background
Understanding How Nova Credit Works
Establishing a new life in the United States often requires credit. Landlords check credit histories when renting apartments, employers check credit reports in pre-employment background screenings, and you need a credit report to get a credit card, take out a startup loan to launch a company, or to get private student loans.
Unfortunately, immigrating usually means leaving your credit history behind. Nova Credit wants to change that, and it does that without charging any fees to immigrants who want to bring their credit with them.
Nova Credit helps make foreign credit reports accessible to U.S. financial institutions and credit bureaus through a “Credit Passport,” a unique report that imports individuals’ foreign credit histories into the United States.
>> Read More: How to Read a Credit Report
Working with Nova Credit
As a lender or other financial institution, getting started with Nova Credit is easy.
Once you’ve set up your account, Nova will instruct you on how to integrate your own systems with your Nova dashboard, so applicants can enter the necessary information into Nova’s system and you can automatically view their Credit Passport.
Nova will customize the form and handle any errors with importing credit bureaus. The Credit Passport data provided by Nova will show the credit history of someone applying for financing, as well as current tradelines, inquiries, credit scores, payments, and credit inquiries.
After successfully integrating with Nova, financial institutions will be able to use their Nova Dashboard to automatically retrieve credit reports and to obtain the Credit Passport of any applicant who applies for financing. This can make it much easier to do business with people from foreign countries.
What Can Immigrants and International Students Expect
For internationals, Nova Credit will transfer prior credit credentials into the United States credit system. Nova Credit currently works with credit bureaus and institutions in many different countries, including Australia, Brazil, China, Canada, India, Korea, Mexico, and the United Kingdom.
Nova Credit recently launched a marketplace where they list credit cards that accept your international credit history. Depending on which country you are from, Nova Credit will suggest which credit cards you may be eligible to apply for using your foreign credit.
After applying for credit with a lender that works with Nova Credit, internationals can download their credit reports for free to see the information that lenders or other financial institutions will receive. These reports contain information including:
- Demographic details
- Public records from other countries
- Credit tradelines established
- Payment history
- Credit inquiries (requests for new credit)
Nova Credit will take the information available from the credit reporting agencies in an applicant’s home country to generate a cross-border credit score that is equivalent to the score traditionally used by U.S. credit reporting agencies. Nova Credit also specifies an applicant’s risk profile so lenders can see at a glance whether the applicant is someone that the lender might want to do business with.
>> Read More: What’s a Good Credit Score?
Advantages of Nova Credit
Nova Credit has advantages for immigrants as well as for businesses. For foreign people coming to the United States, Nova Credit makes it much easier to establish a credit profile in this country.
Previous credit history doesn’t go to waste and U.S. companies will be more willing to do business with you if you can show you have been financially responsible in the past. You can also establish a credit history without a Social Security number, which is a major identifier in the U.S.
For businesses, there are also advantages to Nova Credit, including an expanded customer base because it becomes easier to provide services and financing to foreigners.
Downsides to Nova Credit
There are, unfortunately, some downsides to Nova Credit.
First and foremost, Credit Passport is still growing. Because of that, it is currently not accepted everywhere and not every country is supported. Nova Credit is aiming to help as many newcomers as possible and has historically focused on countries with the highest migration volume to the U.S. However, coverage could increase in the future as the company expands.
Another downside is that an occasional hard credit pull is required when Nova Credit obtains credit information. Too many hard credit inquiries can hurt a person’s credit score, causing credit to be less accessible or more expensive. However, this is inevitable when applying for credit.
Nova Credit’s Background
Nova Credit is a San Francisco-based fintech company that was founded in 2015. The company was launched by Misha Esipov, Nicky Goulimis, and Loek Janssen, three former Stanford University classmates who wanted to address the problem created when immigrants are shut out of the U.S. credit system.
All founders are first-generation immigrants themselves. Esipov moved to the U.S. from Russia at three; Goulimis is English, and Janssen is Dutch. The team has first-hand experience with the challenges that arise when American lenders are not able to access information showing a strong credit history from outside of the country.
At a time when globalization is growing and immigrants face new challenges to moving abroad, Nova Credit’s founders believe it is important to help empower immigrants with the tools necessary to contribute to the nation’s economy. By bringing their credit reports to the United States, Nova Credit hopes to help establish a process for global credit migration in an interconnected world.
Author: Christy Rakoczy