Monday Feb 03, 2020
For newcomers to the United States, getting a credit card is tough. No credit card means renting an apartment, getting a phone plan, or taking a loan, amongst other things, will be an uphill task. So how does one get out of this catch-22 situation?
Through Sable, a new online startup.
Naveen Qureshi, a Pakistani Canadian, co-founded Sable to empowers international students and immigrants in the United States by giving them access to credit cards without credit history. Geo.tv caught up with Qureshi, and the other founders, of the virtual credit to understand how it works.
I moved from Toronto to New York for business school and experienced the challenges of the US financial system as an immigrant first-hand. My Canadian credit history or financial products didn’t help me get a bank account or credit card just south of the border. Not having a bank account to transfer money to meant I had to carry cash with me when moving. So, for weeks, or maybe months, I was not able to get a bank account in the United States, due to which I had to store cash at home, which is obviously a huge security concern. Additionally, immigrants need to start building US credit history immediately upon moving to the US. Not having a US credit history means you will not be able to get a phone plan, rent an apartment without 6-12 months down payment, and get mortgage later down the road.
At business school, I met Towers Wilen, who had been at American Express in NYC for multiple years, and Andrej Paule who had gone through the same challenges as me when moving to NYC from Europe. The three of us spoke to 300 immigrants in person to identify the customer problem, determined the market size, spent weeks understanding regulations, assessed revenue streams, and started partnering with banks and alternate data service providers to create an underwriting model. That is how we founded Sable, a mobile bank for internationals who move to the US.
Immigrants to the US (and US citizens alike) can download Sable from the iOS app store and join the platform in under five mins. The application is very straight forward: you provide your information, choose what product(s)s you want (checking/debit or credit card or both), you verify your identity with your passport, and within five minutes you get a virtual debit card and credit card that you can start using immediately, while waiting for the plastic cards to be mailed to your US address. You do not even need social security.
As immigrants do not have US credit history, in addition to US credit bureau data, Sable uses alternative data sources to determine the credit risk of each applicant and gives access to credit to customers appropriately. Some of the things we take into consideration are your home country credit score (if it exists), your assets and transactions in your home country, your education, your professional career in the US, among various other factors.
The biggest benefit our customers get is getting a credit card in the first place! This would be impossible to get with another bank, and even if one is able to get a secured credit card, the limits are exceptionally low. The second benefit is the ability to build US credit history immediately. We currently provide send and receive money for free. We are launching additional benefits in March that are specifically geared towards our immigrant customers
Sable credit and debit cards can be used anywhere in the world. They run on visa and Mastercard networks. In order to qualify for these products, one must be living or moving to the US.