How to Build Credit History as a US Immigrant
Establishing a Good Credit Rating When Moving to the USA
Sep 3, 2009
Once a person has become established as a US resident or US citizen, it is then possible to apply for a social security number. However, establishing a new credit history in the USA takes a bit longer; credit history from a previous country does not automatically follow a person to a new country.
Establishing New Credit in a New Country
For those who have a bad credit history in a previous country, it is a good opportunity to start afresh; for those who have an excellent credit history in a previous country it means starting out with zero credit. Although this can be frustrating for those who have always had excellent credit history, a new credit history can be built up with patience and the right steps.
Bad Credit History V Good Credit History
By taking the right steps to establish a good credit history, it is possible to start to build up credit and begin to gain the trust of other credit agencies and lenders; however, it is important not to establish bad credit along the way. Bad credit will only slow down the process of obtaining a good credit history in the USA; in addition, taking on a partner's bad credit history may also prevent approval of joint applications for credit.
Opening a Bank Account to Build Credit History in the USA
Opening both a check and savings account in the USA as a new immigrant will help establish a good credit history; make sure the bank account is always in credit and have a regular pay check deposited into the account to build credibility.
Apply for a Student Credit Card to Build Credit History in the USA
As a new immigrant to the USA, it is difficult to obtain a first credit card, even if the immigrant's credit limit and history with a credit card company in a previous country was excellent. It is possible to apply for a student credit card, even if the immigrant is not a student, as student credit cards have low credit limits; paying off the balance in full each month is one way to build a good credit history. After several months, it may be possible to ask for the credit card limit to be raised or the credit card upgraded.
Pay Bills on Time to Build Credit History in the USA
An immigrant to the USA can also build a good credit history by paying bills on time; this makes it easier to establish credit with utility companies and landlords. By paying in advance money which is owed, trust can be established with people and companies and enable future credit borrowings.
Apply for Store Cards to Build Credit History in the USA
It is also possible for an immigrant to build a credit history through store credit cards; most stores will impose a small credit limit on a store card to try to gain customer loyalty. Even if it is not a store which the immigrant shops in frequently, it may be beneficial to apply for a store credit card in order to build a good credit history; provided the store credit card is paid in full each month, it is possible to increase the credit limit after a certain time period.
Take Out a Secured Loan to Build Credit History in the USA
Although an immigrant may not be able to immediately take out an unsecured or regular loan on a purchase, it is possible to build a good credit history by taking out a secured loan (such as a share certificate secured loan) against savings the immigrant already has. Once the immigrant has paid regular payments on the loan for a certain time (either interest only or with capital and interest), it is possible to convert the secured loan to a regular loan or mortgage.
Obtain Free Credit Reports to Check Credit History in the USA
It is possible to obtain free credit reports, once a year, from Equifax, Experian and Trans Union credit agencies through Annual Credit Report ; by checking credit history, an immigrant to the US can make sure that no one else is obtaining credit under a stolen identity.
However, failed credit applications are also reported to the credit agencies, so it is important, before applying for credit, to be confident that the credit application will be approved; failed credit applications will be detrimental to the credit score of an immigrant.
Ways to Build Credit as a US Immigrant
By taking a few simple steps, it is possible to build a good credit history as an immigrant to the USA; however, it takes time and patience to build a good credit history. Without credit, it is difficult to complete many routine tasks such as buying a house, buying a car, booking theater tickets and even paying for gas; therefore, it is important for an immigrant to start building a good credit history as soon as possible.
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