Westlake to accept international credit info for auto loans

Westlake Financial will consider credit information from abroad when evaluating new U.S. immigrants for auto loans, according to its partner in this venture, Nova Credit.

Nova Credit obtains data from 16 countries' credit bureaus and converts it into a score and report intended for American underwriters. The startup, whose results are accepted by American Express in credit card applications, called the partnership with Westlake its first for the auto industry.

"Constant innovation is one of Westlake's core values, so opening up another avenue for potential customers through a first-of-its-kind partnership with Nova Credit aligns with our go-forward strategy," Westlake Technology Holdings Group President Ian Anderson said in a statement Oct. 12. "This unique partnership with Nova Credit not only allows us to extend our reach but also enables us to help newcomers realize their potential here in the United States. To be a part of that is truly fulfilling."

Nova Credit CEO and co-founder Misha Esipov called Westlake an innovative company familiar with data outside of traditional credit reports.

Nova Credit's website indicates Westlake can work with data from 15 countries, including U.S. neighbors Canada and Mexico but also more distant nations such as India, Nigeria and South Korea.

For now, what Nova Credit calls its "Credit Passport" is only an option for Westlake's direct auto lending customers, according to Esipov. But Nova Credit is working on connecting the process to indirect lending through Westlake's dealership partners.

"That is a companywide priority," Esipov said.

Esipov said Nova Credit's founders realized, while attending graduate school at Stanford, many international students found themselves stymied by a lack of U.S. credit history. Even foreign banks doing business in the U.S. might have difficulty dispensing loans to their citizens using credit information from their mutual home nation.

Nova Credit helps immigrants transfer their "reliable financial identity" from overseas by calculating a U.S. credit score based upon information gathered from credit bureaus in other nations that collect similar data. The end result "looks and feels like a regular credit report," Esipov said.

While Nova Credit is new to auto loans, it has provided international data for financing such as student loans and credit cards for years.

Esipov said Nova Credit had proved quantitatively the hypothesis that a borrower's credit history in their native country would be "highly predictive" of performance in the U.S.

Nova Credit's product has allowed lenders to automate decisioning for these international borrowers. And borrowers are able to secure rates "representative of their true credit risk," he said.

The Census Bureau last year estimated the number of immigrants in the U.S. would grow to nearly 54 million by 2030, compared with 40 million in 2010. And immigration will replace births as the No. 1 driver of population growth by 2030, the agency estimates.

Esipov called failure to lend to immigrants "a strategy to lose market share over time" given America's shifting demographics.

About a week after Nova Credit announced the Westlake partnership, the artificial intelligence personal loan credit-evaluation firm QuadFi announced it could translate foreign credit scores for Canadian lenders, "mostly in real time," COO Mehdi Ghaffari said Monday his company also could format the information for U.S. lenders as well.

QuadFi has contracts with credit bureaus in the U.S., Canada, Mexico, Nigeria and the Philippines and is working on converting other nations' scores.

For now, QuadFi has incorporated these translated scores into its core work facilitating personal loans. But it said Monday that it was "in discussions with partners" to offer the scores as a separate product for sectors, including banks and dealerships.

"We have started to work with auto lenders and seeing great traction in the segment," Ghaffari wrote in an email.