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 in the country to co-sign for her apartment, she had 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, the 38-year-old is the co-founder and CEO of TomoCredit — “tomo” short for tomorrow — a San Francisco-based fintech startup that helps people, especially those with a limited credit history, to 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 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.”

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.

“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, she didn’t have any family members to help her navigate the country’s credit system. Asa result, she was unaware about the importance of having a borrowing history with a bank to build credit.

“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.

Kim built TomoCredit for her younger self. She shared two key tips for building your credit for newbies:

• Learn about your credit scoreas early as possible.

She suggests learning about how credit scores work and finding out what your score is as young as possible.

“Not many people even know what the definition of credit score is. [It is] your likelihood to pay back [a loan] in the next 12 months,” said Kim. “Know your score … even at 18 years old. You might have nothing. You might have something if your parents added you to their file. So, know what it is, know what it means.”

• Start small when you don’t have a score.

For people who don’t have a credit score, Kim suggests starting small by borrowing small amounts of money from the bank that you know you can pay back with ease. Whether it is $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.

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