Credit Card Lender Measures
Potential, Not Risk, of International Students
January 26, 2017
leaving Beijing to attend a university in the United States, Jack Guo
has learned to navigate a new language, different methods of getting
around town, and even a new way of managing his money by obtaining a
U.S. credit card.
“A lot of my friends have the cards already because it’s pretty
important to get around L.A. (Los Angeles),” Gao said. “And also, if
you’re going to stay here afterwards for a job, for internship, for
career, of course, you are going to consider buying property to live
here, and having credit is pretty important if you want to get a loan.”
More than 1 million international students are studying in the United
States. Many of them find it helpful to have a smartphone and a credit
card. Unlike many cash-based societies, credit cards are widely used in
the U.S., especially with the advent of e-commerce. With a mobile
application, users with a credit card can buy things and order food or a
Obtaining a credit card, however, is not easy for international
students. Traditional U.S. lenders often require an applicant’s Social
Security number and a record of their credit history, which most
international students don’t have.
“The traditional system was designed in the 20th century before the
internet, before smartphones, before social media and is kind of
antiquated. We are inventing a new system,” said Kalpesh Kapadia, a
former international student from India.
Kapadia is the co-founder and chief executive officer of a Silicon
Valley-based lender called SelfScore. It measures the potential of the
student, and not just the risk, through an unconventional way of
determining an applicant’s creditworthiness.
“Everyone has a smartphone. Everyone has a social media presence, so
what we look at is that these people have been through many filters in
society,” he told VOA.
Kapadia says SelfScore looks at documents such as passports and visas.
There is also the academic criteria, such as an applicant’s acceptance
to a school, and potential ability to pay. Kapadia says fewer than 1
percent of SelfScore’s 10,000 credit card holders are delinquent on
is a highly motivated population,” he added. “Someone who comes here
10,000 miles (16,000 kilometers) away to make their life better through
education is going to behave quite differently.”
Small percentage pay late
The 15-20 percent who do not pay the monthly balance in full are charged
about 19 percent in interest fees. Making payments in full and on time
can help card holders obtain larger loans in the future in the U.S.,
like those needed for a car or a home.
“One of the benefits I hope to get is to build credit, which is very
important in terms of whether you want to get a loan from a bank,” Guo
said as he considers his options after getting his university degree.
So far, students from more than 66 countries and attending 400 colleges
in the U.S. have a SelfScore credit card.