Cynthia Chen came to the US with no money. Now he has a $1B company to give ‘invisible’ people a fighting chance
When Cynthia Chen arrived on the Columbia University campus in 2000, she was 17, fresh from Beijing and completely alone. He had zero credit to his name – he had never seen a credit card.
Fast forward 26 years and he runs Kikoff, a credit-building company with over a million active users and a $1 billion valuation – official “unicorn” status in the tech world (1). The company has been expanding its AI offerings, including avatars that can call debt collectors on behalf of customers.
When he arrived, Chen said For money that it was his early experience as a student paying cash while others used credit cards that taught him what access to credit means in America.
“I realized how important it is for a person like me, a newcomer who was unknown, to establish credit so that I can move around the country,” he said.
Chen founded Kikoff to support people with “invisible credit,” those with no credit history or what he calls “small files.” For them, getting a loan is not the only challenge. It can also be difficult to do basic things like renting an apartment or passing a background check for a new job.
Finally, there were 7 million “invisible” Americans, according to the Consumer Financial Protection Bureau (2).
The group includes students, immigrants and women who may struggle to get credit because they do unpaid or low-wage work, or because their male partners carry credit cards.
This is how Chen says his company is trying to help.
Kikoff is aimed at people whose scores are at or below 600. In general, credit scores range from 300 to 850.
Chen says the goal is to help Kikoff users raise their credit scores above 600, which is the minimum number most homeowners, prospective tenants, car dealers and real estate lenders sign contracts for.
He adds that most Kikoff users see their credit scores improve by an average of 86 points within a year.
That may not sound like much, but Chen says it can be life-changing for someone who starts with a score below 600 and crosses that threshold. It may mean qualifying for a better apartment or mortgage.
The three biggest factors that go into your credit score are: payment history (35% of your score, up to 298 points), use of credit (30%, up to 255 points) and length of credit history (15%, up to 127.5 points).
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Kikoff is working to develop those areas with a subscription-based model starting at $5 a month.
Each month, users pay their subscription and the company reports those payments to three credit bureaus, Equifax, TransUnion and Experian. This helps build a good payment history and length of credit history on individual credit reports. The company may also report subscriber rental payments and equipment to credit bureaus.
“It gives you credit for something you’re already paying every month,” Chen said.
Subscribers also receive a $750 credit that can be used only at the Kikoff store, where they can purchase financial literacy e-books, courses or subscription renewals.
Chen says it’s fine if users don’t use any of the $750 credit. In fact, that can help their credit score. The credit bureaus issue scores to people who get too much credit. The more credit you have, the better.
Subscribers can sign up for additional credit options, including a secured credit card. This helps to build them a combination of debtsmaking up 10% of the credit score and up to 85 points.
Another way the company helps improve credit scores is by using AI to identify errors in credit reports and submit disputes on behalf of customers to the credit bureaus.
Chen admits that some people may feel uncomfortable with AI services, but they are opt-in systems that require full customer consent. Recently, the company launched an AI-powered debt negotiation service that can call collectors on behalf of Kikoff subscribers to negotiate payment plans.
The tool has been particularly useful for customers with disabilities, including those who are hard of hearing or speech impaired who may find it difficult to call lenders.
The latest version of the app includes a Spanish language option, part of Chen’s ongoing commitment to support invisible credit.
He says: “That is the community that is dear to my heart.”
While he admits that Kikoff has helped increase users’ cumulative credit scores by more than 200 million points, he admits that there is still a long way to go.
“The level of debt in America keeps going up,” he said, pointing to statistics like the $1.28 trillion Americans are in credit card debt.
And you agree that even with a credit building program, there is no quick fix for bad credit.
“I wish there was a magic wand you could use to turn 500 credit points into 850 in a second,” Chen said. “Persistence and being patient and believing in the process will be very important.”
It worked for him. Chen is now in a bank so he works for his clients.
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Medium (1); Consumer Financial Protection Bureau (2)
This article provides information only and should not be construed as advice. Offered without warranty of any kind.
