Immigrant’s Guide to Building a Credit Score in the U.S

(Newswire.net — September 14, 2020) NY, NY — 

The Ultimate Immigrant’s Guide to Building a Credit Score in the U.S.

Moving to the United States holds many challenges: getting to know a new place, establishing new connections, and most of all – adapting to a new financial system, under which all immigrants face a frustrating barrier: no credit history. Regardless of your financial background, a U.S. credit history is something you would need to build from the ground up, and is essential to start building your new life in what hopefully will become your new home.

A lack of credit history can hinder your ability to get a credit card, buy a car, or even rent an apartment. Whether you relocated to the U.S. for school, work, or family, building your credit history is one of the most important things you can do after immigrating to the United States, sooner rather than later. This guide will help you understand what is a credit score, how to gain it, and how to make it excellent.

What is a credit score?

A U.S. credit score, also known as FICO, is quite literally: a score attached to your financial activity, which represents your probability of repaying your loans in a timely manner, based on your repayment history. The credit score can range from 300 to 850. The higher your score is, the better your purchasing power can be: with better interest rates on loans or mortgages, and a higher monthly credit.

The immediate problem most immigrants face after moving to the United States is, quite literal: having no payment history in the U.S., how can you prove your creditworthiness to start and build your credit?

First Things First: Track Your Credit Information

The United States has three credit bureaus who collect your credit information, and sell to the creditors. Those credit bureaus Transunion, Experian, and Equifax, normally use your Social Security number to match your information and give an indication of your initial credit score. 

However, it is important to note that you do not have to have a Social Security number (SSN) to get a credit score, or a credit card. While that type of information makes it easier for credit bureaus to report information accurately, if you do not have your SSN yet, do not wait, you can start building your credit NOW. 

Step 1: Apply for a Credit Card

Depending on where you are originally from, getting a credit card might sound like a basic step in the journey of moving to a new place. However, in the U.S. it might not be as easy as it seems. For immigrants, the most simple way to build a credit history is just getting a credit card and start using it.

To apply for a credit card, you would typically need to demonstrate to the bank or credit issuer that you can put a certain amount of money in a bank account and leave it there. The idea is that the initial credit you will be allowed to borrow, should proportionally match the amount that you are able to deposit.

As an immigrant without  a financial history in the U.S. you might encounter a lengthy bureaucratic process when applying for your credit card, or even a refusal. Keep your eyes on the prize: even if you get refused, start building a relationship with your bank through your checking account and debit card. Demonstrate consistent payment habits, maintain a stable account balance, and consider opening a savings account. The more information the bank has on your payment history, the easier it will be to get an initial credit card.

The information you will typically need to provide in order to receive a credit card is a permanent address (either in the U.S. or your home country), a proof of employment, and a bank account in the U.S. Depending on your visa, you might need to provide your passport, Visa, and various immigration forms that show your status eligibility.

Had a Good Credit Score in Your Home Country? You Might Be Able to Transfer It.

Depending on your home country’s financial system, you might be able to transfer your original credit score to the U.S. to indicate your payment history. If you happen to have a bank account in an international or American bank in your home country, such as American Express, the process can be fairly straightforward.

Otherwise, there are some private companies that can do that for you. Some would do the work for you for a fee, and other companies such as Nova Credit, would actually translate your credit history free of charge. This process can shorten the way for an excellent credit, providing that your credit back home was excellent as well.

Still struggling? Try to Use a Co-Signer

If you have a close friend or family member with an established credit in the U.S., it might be easier for you to have them co-sign your first credit car. Not only does a co-signer declares responsibility for your debt – which demonstrates faith in your ability to pay it – you can also enjoy their good credit footprint to build your own.