American Express and Nova Credit tie-up extends credit access to US immigrants

The news: American Express expanded its partnership with startup Nova Credit so US immigrants can use their home-country credit history to apply for Amex cards, per a press release. Nova Credit helps extend credit access to immigrants, whose credit histories traditionally aren’t transferred into the US financial system.

First announced in 2019, the tie-up helps US immigrants coming from Australia, Canada, India, Mexico, and the UK and will expand to immigrants from Brazil, the Dominican Republic, Kenya, and Nigeria.

How it works: Nova Credit’s Credit Passport technology converts foreign credit data into a score and report similar to the US underwriting process. This credit data is delivered in real time to banks and is integrated directly into Amex’s online card application process.

Why this matters: According to Nova Credit, it can take immigrants and expats up to five years to build an equivalent credit history in the US that they had in their previous country of residence. The partnership will therefore help expand Amex’s access to a large underserved group: There were 44.8 million immigrants in the US in 2018, making up 13.7% of the nation’s population, and more than 1 million arrive each year, according to Pew Research.

• Working with Nova Credit helps Amex reach a consumer base that was previously hard to tap. The move reflects a broader industry trend to expand financial inclusion and attract a broader range of customers: In October, US Bank unveiled two new rewards-centric secured cards, for example. But Amex’s partnership lets it grow its base without dipping into a segment of subprime borrowers—many of these immigrants already have good credit in another country.
• The tie-up can also help Amex grow its cross-border volume because these consumers may be more likely to spend in multiple countries.
• Expanding its consumer base should also help solidify Amex’s recovery: In Q3, it acquired 2.6 million new proprietary cards, and its total network volume surged 29% year over year (YoY) and 4% compared with Q3 2019 (Yo2Y)—reflecting positive growth from pre-pandemic levels for the first time.

Related content: Check out our “Credit Cards in the ‘Next Normal’” report to further dive into how credit card issuers are changing their growth tactics post-pandemic.