The Tomo Card, created by San Francisco-based startup TomoCredit, is a bank card for these with no credit score or poor credit score (FICO scores of 629 or beneath) who wish to set up a credit score historical past with out carrying a month-to-month steadiness. Not like numerous playing cards that focus on the same viewers, there isn’t any annual payment, safety deposit and even APR.

Tomo Card

Picture courtesy of TomoCredit

Additionally not like conventional bank card issuers — which often conduct a hard inquiry when reviewing your utility — TomoCredit by no means runs a credit score test. As an alternative, the corporate’s proprietary know-how can weigh many knowledge factors, a key few being your revenue (or revenue potential) and your account balances. The financial institution that points the cardboard, New York-based Neighborhood Federal Financial savings Financial institution, makes use of this knowledge to find out whether or not you’re a superb candidate for the cardboard.

On this means, the Tomo Card is much like different alternative credit cards that may use distinctive underwriting strategies that are not essentially tied to credit score scores. However that does not imply the cardboard is correct for everybody.

Listed here are 5 issues to know in regards to the Tomo Card.

1. There’s a ready interval

The applying course of is not as simple as with different playing cards.

You’ll must first see whether or not you’re preapproved by submitting your age, revenue and checking account balances on the web site. A preapproval means, in essence, that the issuer is providing you with a “gentle sure” based mostly on the data you offered.

Should you’re preapproved, you’ll get to maneuver on to the following step. The corporate emails you an invite to formally apply for the bank card. That is the place chances are you’ll expertise a lag. Relying on the quantity of candidates, it might take as much as a number of weeks so that you can obtain the invitation to formally apply, in accordance with Kristy Kim, CEO of TomoCredit.

When you submit the official utility and TomoCredit can evaluation different knowledge factors, you’ll get an approval or rejection.

2. No credit score test is required, however a linked checking account is

As a result of there isn’t any arduous pull in your credit score report if you formally apply, it gained’t affect your credit scores the best way a conventional bank card utility does. As an alternative, TomoCredit says it appears to be like at plenty of knowledge factors to find out eligibility. One in every of them is how a lot cash you could have and the way you handle it.

It makes use of totally different knowledge factors similar to your cellphone quantity, e mail deal with, the channel used to join the cardboard, the steadiness in your checking account, the quantity and stability of your revenue, and potential crimson flags, in accordance with Kim.

To get this data, TomoCredit requires you to hyperlink at the very least one account by way of Plaid, a third-party service supplier. You possibly can hyperlink a checking account, financial savings account, funding account or one other eligible account.

Your checking account login particulars aren’t saved and are not seen to TomoCredit staff, in accordance with the corporate’s web site. Plaid additionally encrypts the information for safety functions.

Nerdy tip: Should you want to not hyperlink a checking account, a secured credit card may very well be an choice. These playing cards could be ideally suited when you have poor credit score or no credit score, however not like with the Tomo Card, you’ll must provide you with a safety deposit upfront — often just a few hundred {dollars}, relying on the cardboard. You sometimes get the cash again when you shut or improve the cardboard, assuming you’ve maintained a superb fee historical past.

3. There is no APR as a result of you possibly can’t carry a steadiness

The Tomo Card doesn’t cost any charges or curiosity. As an alternative, TomoCredit makes cash from interchange fees — a surcharge assessed on the service provider if you use your card to make a purchase order.

Therefore, not like conventional bank cards, the Tomo Card does not help you carry a steadiness from one month to a different, making it not possible to rack up debt. You initially begin off with a seven-day automated fee schedule. A fee is robotically deducted out of your checking account to cowl the steadiness each week.

Frequent funds maintain your credit utilization low (a key think about your credit score scores) and assist you to set up credit score. Funds are reported to all three main credit score bureaus: TransUnion, Equifax and Experian. These firms gather the data used to calculate your credit score scores.

After about three months with the cardboard, TomoCredit permits you to shift the fee schedule to a extra conventional cadence of as soon as per 30 days, in accordance with Kim.

Nerdy tip: Even with out the danger of charges or curiosity, it’s best to nonetheless make funds on time to stop the cardboard from being frozen and your credit score from taking successful. Accounts which might be delinquent should still be reported to the credit score bureaus and get despatched to collections, Kim says.

4. The credit score restrict is doubtlessly beneficiant, and it earns rewards

Relying on the components that TomoCredit weighs in its underwriting, it is potential to get a credit score restrict of as much as $10,000. After making the primary fee on time, you might also see your credit score restrict enhance, Kim says.

Cardholders may even get a 1% cash-back rewards price, which is beneath common for conventional playing cards however aggressive amongst playing cards on this class.

You possibly can redeem rewards for assertion credit score.

5. You could qualify with no Social Safety quantity

Newcomers to the U.S. who wish to construct credit score may qualify for the Tomo Card. Should you don’t have a Social Safety quantity or Particular person Taxpayer Identification Quantity, it’s potential to use together with your passport data, Kim says.

Equally, these playing cards cost no annual payment and earn rewards.


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