There are many challenges that new US immigrants must conquer. And one of these challenges is that you have no credit history to begin with. Without a credit history, it will be difficult to find a home, purchase a vehicle or even get a mobile phone.
If this is your problem, read on and find how you can build your credit as a new US immigrant:
How Immigrants Build Credit
Apply For A Credit Card
The easiest way to build your credit is by applying immediately and using a US approved credit card. If ever your first application will be denied try applying in person at a credit union or bank. Explain your current condition and bring proof that you have a positive credit score back at home. You can also request for a secured type of credit card which requires you to have a deposit upfront and will be less of a risk to the lending institution. If you have a credit card that is provided by an international bank, request them to provide you an American version of your card.
Pay On Time
It is unknown exactly how credit scores are determined. However, two factors affect them significantly. These factors are your history of payments and utilization of credit. In other words, it is recommended to only do small purchases at first so that you will not immediately spend all your credit. It is also compulsory that every month you must always pay your bills on time. Once you have a credit card, make reminders to help you manage your due dates.
Get A Social Security Number
One of the first things you will need in order to build credit in America is a social security number. During the past years, an international taxpayer ID was enough but these are no longer utilized with the new CRA systems. You will also need to provide your current address in the United States to be able to apply for credit.
Technically an SSN is not required but you will need it if you want to be practical. Credit bureaus can make your credit scores even if you don’t have any SSN by assessing other information you have provided. But it will be hard to build your credit without an SSN. Most lending companies will require you to have an SSN in order to determine your credit when you apply. If ever you still get approved to get a line of credit but don’t have SSN, that reference will not show up in your credit report.
Getting Credit Will Just Be The Beginning
To establish a good credit score, you must be able to showcase an excellent history of payment over time. It is important that you utilize your credit if you want your credit to increase. In short, if you are able to get a secured credit card, use it every month to avail of small purchase in order to keep it active. However, you should also remember to pay your full balance to avoid incurring charges.
Unfortunately, you can’t immediately have a good credit score overnight. Building credit takes time, because one factor affecting the calculation of your credit score is the length of time you have had credit accounts.
The bottom line is you have to take it slow and steady. Be careful when availing any credit processes to shortcut the method. You need to take everything step by step, so follow everything in this guide and once you have a credit history as reference under your name for at least half a year, do these steps all over again.