The three major credit bureaus—Experian, TransUnion, and Equifax—play a vital role in managing Americans’ credit histories. If consumers’ payment data does not appear in the records maintained by these bureaus, they may find themselves with little to no credit history. This predicament greatly impedes their ability to obtain credit cards, personal loans, car loans, or mortgages. Recently, the credit bureaus have terminated their data-sharing agreements with TomoCredit, a startup based in San Francisco known for its claims to enhance consumers’ credit scores through reporting rent and utility payments, and by providing credit lines. Despite TomoCredit’s assertions of positive impact, the change in partnerships highlights growing concerns over the startup’s reliability as a data furnisher.
Consumer complaints regarding TomoCredit have surged, focusing mainly on the challenges of canceling subscriptions and the lack of credit line visibility in individuals’ credit histories. Furthermore, evidence shows that the major credit bureaus are not accepting information reported by Tomo. In spite of the troubled startup’s claims about working closely with these bureaus to benefit consumers, it has come under increased scrutiny as many customers have reported that their Tomo credit lines have failed to appear in their credit records after short periods. This situation has raised alarms over the legitimacy and reliability of the service that TomoCredit provides, as tensions with the major credit bureaus deepen.
Responding to inquiries from Forbes, Tomo’s founder, Kristy Kim, denied the accuracy of reports about the bureau partnerships being terminated. However, her responses lacked detail and were met with skepticism. She portrayed Tomo as being an essential player in bridging good borrowers—who may have thin credit histories—with lenders, while simultaneously acknowledging that there have been difficulties in the service. Even though Tomo was valued at $222 million in a previous funding round and has received substantial backing from prominent financial institutions, the validity of its services remains questionable as clients do not see the anticipated results in credit generation.
Interestingly, Tomo has maintained the logos of the major bureaus on its website, claiming to facilitate credit building across all three agencies. However, internal communications reveal that both Equifax and Experian have requested the removal of their logos due to the cessation of data sharing. Moreover, exclusive data shared with Forbes indicates that as of August 2024, there are virtually no records of Tomo credit lines remaining in the debtors’ files, a stark contrast to the earlier period when hundreds of thousands of such records existed. The withdrawal of these records implies that credit bureaus have conducted a thorough cleanup of their datasets, which raises questions about the service’s operational integrity.
The credit bureaus have historically opted to maintain silence about individual data furnishers. However, statements from Equifax confirm that TomoCredit has been deactivated from their system, underlying a commitment to quality and compliance in the data that these bureaus accept. Experian emphasized their ongoing diligence to ensure the accuracy of data, while TransUnion echoed sentiments of responsibility and high standards for all partners. These declarations indicate that all three bureaus are stepping up their scrutiny of data providers, especially in light of recent consumer protection examinations conducted by regulatory bodies, pointing to increased regulatory pressures accordingly.
To elucidate the circumstances surrounding Tomo’s partnerships’ termination, financial experts point to possible red flags in data reporting practices. If a company like Tomo experiences a high volume of disputes from consumers, it risks becoming a pariah within the credit data ecosystem. Furthermore, a company that fails to adequately address disputes or responds uniformly without proper investigation could be viewed as problematic. Most seriously, if there were a case where an entity falsely reports credit history data, it could face severe ramifications, including exclusion from data-sharing networks. While there is currently no evidence that Tomo has engaged in fraudulent reporting, the persistent challenges faced by both the company and its consumers highlight significant risks associated with lesser-known credit reporting partners in the industry.
