Experian, TransUnion, and Equifax have all ended their data partnerships with TomoCredit, a San Francisco startup that claims to help boost consumers’ credit scores by opening lines of credit for them and reporting their rent and utility payments to the credit bureaus. The bureaus have refused to include credit lines reported by TomoCredit, and consumers have reported that Tomo’s credit lines do not appear in their credit histories. Despite the bureaus’ actions, Tomo still displays the Experian, TransUnion, and Equifax logos on its website, under the claim of providing tools to build credit scores with all three bureaus.
Data shared exclusively with Forbes shows that the credit reports from the three bureaus have virtually no records of any lines of credit from Tomo starting in August 2024. This is a significant change from earlier this year when tens of thousands of Tomo credit lines were reported in the bureaus’ records. While the bureaus typically do not comment publicly on individual data furnishers, Equifax has confirmed that it has deactivated TomoCredit from its system, and Experian and TransUnion have not provided specific comments on their relationships with Tomo. Consumers have voiced complaints that Tomo’s credit lines do not appear in their credit history, raising questions about the accuracy of Tomo’s reporting.
Financial services attorneys suggest that credit bureaus may terminate partnerships with data providers or purge historical data for reasons such as a high rate of disputes or failure to respond to disputes. While it is unclear why the bureaus have ended their partnerships with Tomo, the regulatory pressure on credit bureaus to verify data from furnishers like TomoCredit is evident. The Consumer Financial Protection Bureau highlighted deficiencies in furnishers’ compliance with the Fair Credit Reporting Act, noting that some furnishers failed to respond to disputes, yet their information continued to appear in consumer reports.
TomoCredit, a startup last valued at $222 million in a 2022 fundraising round, has raised about $40 million in equity funding from backers including Morgan Stanley and Mastercard. Founder and CEO Kristy Kim has defended Tomo’s mission of connecting good borrowers who lack credit history with lenders, stating that the company aims to bring positive innovation to the industry and benefit consumers. However, the decision by the three major credit bureaus to end their data partnerships with Tomo raises concerns about the accuracy and reliability of the credit information reported by the startup.
Consumers like Jasmine Burch and Felisa Ware have reported that Tomo’s credit lines only appeared in their credit histories for a limited time or not at all. Burch, a VIP plan subscriber, saw Tomo’s credit line in her credit history for just one month, while Ware, who subscribed for several months, never saw a Tomo credit line appear. The lack of reporting by Tomo raises questions about the effectiveness of the service in helping consumers build credit. TomoCredit’s failure to have its credit lines accepted by the major credit bureaus has implications for consumers seeking to improve their credit scores and access financial products like credit cards, personal loans, and mortgages.
While the reasons behind the bureaus’ decision to end their partnerships with TomoCredit remain unclear, the actions suggest a potential lack of confidence in the accuracy and reliability of the credit information reported by the startup. The regulatory scrutiny on credit bureaus to monitor data furnishers and ensure compliance with credit reporting laws adds further pressure on companies like TomoCredit to provide accurate and timely information. As consumers continue to express concerns about the visibility of Tomo’s credit lines in their credit histories, the future of the startup and its credit-building services remains uncertain.
