NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Millions of immigrants enter the United States lacking something important for success: a documented financial history or credit score. Unable to prove their reliability to lenders, they find it harder to rent an apartment, lease a car, or get their first credit card. A lack of credit score hobbles immigrants as they try to get a footing in American life.

It’s not only poor immigrants who experience inconvenience and hardship, says Misha Esipov, cofounder of an alternative credit scoring startup called Nova Credit. Even people with decent scores in their home countries become “credit invisibles” once they arrive here–consumers who can’t prove their viability to the mainstream U.S. financial system.

Traditionally, the credit reporting industry has operated on a nation-by-nation basis. There have been no international standards by which bureaus and their financial clients have shared data about customers. Each time people have emigrated, they’ve effectively gone back to square one–that is, to having little or no credit score in their adopted countries.

Photo courtesy of reynermedia.