US fintech Nova Credit expands into Europe to “unlock opportunities” for immigrants

Cross-border credit bureau Nova Credit is expanding across Europe, starting in the UK.

The fintech aims to “unlock opportunities” for people historically excluded from the credit system, who cannot carry their credit history with them when they immigrate countries.

Nova Credit will focus initially on the UK before expanding to the rest of Europe.

The San Francisco-founded fintechs believes it can accelerate financial inclusion for the millions of creditworthy people who immigrate to new countries every year.

“Until Nova Credit, there’s been no standardised way for lenders to communicate with credit bureaus around the world,” Nova Credit co-founder and Nova Credit UK executive director, Nicky Goulimis, said.

“In a world where so much is instinctively interconnected and internationally available with one-click ease, Nova Credit is creating a new world order for global credit data management that makes relocating between countries more frictionless than ever.”

Historically, individuals that do not have a credit history that can be evaluated by lenders in their destination end up struggling to access fairly based credit-based products such as credit cards or phone contracts.

As a result, they might have to pay as much as six months’ rent upfront or find a guarantor to rent an apartment, for example.

The fintech pulls newcomers' established credit data from their country of origin and converts it into an equivalent credit score that lenders and credit providers in their new host country can use to underwrite applications.

“Millions of immigrants cross borders every year to work, study and establish new lives for themselves and their families. In doing so, they leave years of credit history behind them, ‘stuck’ in the countries they’ve left,” Nova Credit VP international & Director of Nova Credit UK director, Collin Galster, said. 

“The majority of these individuals are creditworthy, yet underserved. Without access to their past credit history, lenders have no choice but to automatically decline their applications for new finance.”

According to Nova Credit, of the 10 million immigrants in the UK today, 3.5 million are relative newcomers with little to no UK credit history but could be categorised as creditworthy borrowers based on their credit history in their country of origin.

Credit Nova pulls individuals’ credit data from their country of origin and converts the information into an equivalent score and report that is suitable for lenders and financial service providers in their new host country.

“By 2035, 100 per cent of the UK’s annual net population growth is expected to come from immigration,” Nove Credit head of UK market development Matt Davies said.

“Creating financial services that work for these people - the majority of whom are highly skilled and educated - from day one of their arrival is essential.”

Nova Credit has developed partnerships in more than 20 countries globally to be formatted for use in the US and unlocked consumer-permissioned access to more than 2 billion credit profiles.

The company will launch from its UK base to build partnerships with more credit bureaus across Europe and then the rest of the world. 

Since launching in 2016, Nova Credit has been used by financial service providers such as American Express, Verizon and SoFi.