New to the US? Learn How to Build Your Credit
There are plenty of hurdles faced by people who come to the United States from abroad, whether they are studying for two years or moving permanently. One often overlooked but quite vexing issue is credit history, or, actually, the lack thereof.
Having a credit history is actually vital to a person’s ability to take advantage of a lot of financial services in the United States—and it’s often important for even simple transactions like renting an apartment.
Most Americans are able to establish a credit history over time, starting as a teenager when they get their first bank account. Their parents might make them an authorized user on a credit card; they go off to college and establish a history of paying their school expenses, utility bills and student loans on-time. By the time they have a job, they’ve established the foundation of a credit history and generally don’t have trouble getting a credit card or car loan.
Foreigners, on the other hand, arrive to the United States in their 20s, 30s or older with a totally blank slate. Even with a job, they might find it difficult to get a credit card… and then be told that they need a credit card to establish a credit history… so that they can get a credit card.
General information on building credit can be useful for immigrants, but here are some specific ways that immigrants can start to build their history.
Look into credit cards for foreign citizens. There are a couple of credit cards that are designed for non-U.S. citizens, like the Deserve MasterCard, which is specifically for international students.
Open an account with an international bank with branches in both your home country and the United States. Many banks are more likely to issue you a U.S. credit card if you have an account with them in your home country. If you have accounts with an international bank at home, see if that bank will give you a credit card here in the United States. This is especially true if you have a credit card with that international bank.
Credit Without Borders offers foreign citizens living in New York State car loans, even if they don’t have any credit history at all.
Start with a secured credit card. Secured credit cards are structured to help people build credit. You put money in the bank to “secure” the card—for example, if the limit is $250, you start off by putting $250 in an account with the bank. Use the card frequently but don’t ever have a balance of more than 50% of your limit, and always pay the card off at the end of the month. If you do this, it won’t take long before your credit history is good enough to get a regular credit card.
See if your bank can access your overseas credit report with a service like Nova. There are new start-ups trying to solve this very problem facing new arrivals in the United States. Depending on your home country, there might be a way to get a lender to consider your credit history abroad.
Building a credit history is an important part of starting your life in the United States. It will help you rent an apartment, and is essential for the long term goal of getting a mortgage.