Yup, that’s one thing more difficult to move from country to country than your mattress: your credit score. Relocating can be stressful but oh so rewarding once you get everything in order. For those immigrating to the United States, credit-building may be one of the greatest challenges to overcome.
When first arriving in the U.S., you may be“credit invisible” to the credit bureaus. You don't have a credit history because you’ve never used credit in the U.S. You won't have a U.S.-based credit report or credit score without a U.S. credit history.
An excellent credit score is what typically lets you borrow credit. If you want to buy a home, a car, or take out a student loan, your credit score is what tells creditors whether or not you’re worthy.
Sadly, you may be abandoning a stunning credit score by moving to a new country, but that shouldn’t keep you from pursuing change. In most cases, credit scores from other countries aren’t transferable to the U.S. You may not have even heard of a credit score until arriving here.
Whether you’re new to the world of credit, rebuilding with some experience, or going from fighting final bosses back to demos, we have a few tactics you can use to help you build credit in the UnitedStates.
First, What Do You Need To Start Building Credit?
To open credit-building accounts, you first have to file applications successfully. Frequently, an application will ask for your social security number (SSN) or Individual Taxpayer Identification Number(ITIN). Your SSN and ITIN are secure ways to identify who you are and keep track of all your records in the U.S.
ITINs are used for people who aren't eligible to receive a Social Security Number or Employer ID Number. Many immigrants start off filing their taxes and applying for credit with an ITIN.
Although you can use your ITIN to open a bank account or get a loan, you may still find it challenging to get a credit report and build credit with an ITIN alone. Sometimes, when you use only an ITIN, lenders don’t report all of your information to the credit bureaus because you’re a nonresident.
If you start to build credit with your ITIN and later become a U.S. citizen, you don’t have to worry about your progress being lost. Going from using an ITIN to an SSN on your credit accounts is practically like filing a name change. It’s not like you have an ITIN credit score and anSSN credit score, you’re still the same person with the same U.S. credit history.
Your ITIN and SSN are ways of identifying you in the credit bureaus’ systems, the bureaus will connect the two identification numbers, and all of your U.S. credit history will be in one place.
Whether you’re using an SSN, ITIN, or neither building or rebuilding credit can be difficult, but there are still some options.
#1 Become An Authorized User
If there’s a responsible credit card user in your life who’s from the U.S., then you should consider becoming an authorized user on their account. Being an authorized user means that your name will be attached to someone else’s credit account.
As an authorized user, you can receive a card of your own (or not) and just be seen as someone responsible for the bank account. You’re not obliged to pay the credit card bill or debts, but the credit card activity will be accounted for on your credit report.
You’ll want to be sure of two things before you go down this route: 1. The credit card company reports authorized users to the credit bureaus. 2. The account holder will make sound financial decisions and keep their account in good standing.
If you’re moving to the U.S. to be with your spouse, children, or parents, they might be able to help you out by attaching your name to their accounts.
Being an authorized user is a great way to start building credit if you don’t have any, just be sure that the accountholder will make sound financial decisions for both of your credit reports.Once you become an authorized user, the card issuer will report the account to at least one credit bureau, and you’ll start to build credit!
#2 Use a Debit Card That Builds Credit
There are ways to get approved for a credit card without an SSN or strong credit history, but why apply for a credit card when you can use a debit card? Extra is a debit card that helps you safely build credit.
There is no credit check when you apply for the Extra card, so a non-existent credit score won’t keep you from being approved. By connecting the Extra card to your checking account, you can go about your regular spending and build credit while you’re at it.
Extra reports your everyday purchases to the major credit bureaus as credit-worthy so that you can build credit without the dangers of credit card swiping. If you want to build credit without worrying about going over budget or dealing with a monthly bill, swipe with Extra.
Extra allows you to build credit with a debit card. By allowing you to build credit without a credit card, Extra is helping you avoid credit card debt, credit checks, interest, and credit limits.
#3 Have Your Bills Reported to the Credit Bureaus
If you pay rent, utilities, or have a car lease, you can start to build credit without an SSN. Some of your payments automatically get reported to credit bureaus, but you can ask that they do for the ones that don’t.
If you’re good about paying your bills on time, you should see if your landlord, property manager, or leasing company reports payments to the credit bureaus. If your payments get registered, you’re in luck; let the credit-building begin!
#4 Get A Credit Builder Loan
Credit builder loans are great solutions for people with little to no credit, and most people get approved for them. There are even lenders who offer credit builder loans for U.S. immigrants in particular (more on that later).
When you’re approved for a credit builder loan, the amount you borrow is held in a bank account while you make payments.Usually, the money remains untouched by you until the loan’s fully repaid.
Once fully repaid, the loan amount is transferred to your savings account. A credit builder loan is basically a way for you to systematically build credit while building savings (a water two plants with one hose kind of deal).
Even though you’re not using the money, you’re simultaneously building savings and your credit. Your loan payments are reported and considered on your credit report. Having your payments reported will help you build credit as long as you keep up with them.
#5 Look Into Credit-building Solutions Designed For Immigrants
Another option is to work with one of the newer services geared toward immigrants who lack a U.S. credit history. Some companies have been working to develop ways in which you can get your credit report from other countries converted into a form that U.S. lenders accept.
If you can get your previous credit history taken into account, that can make getting approved for credit in the U.S. a whole lot easier.
Some lenders specialize in extending loans toU.S. immigrants. Rather than looking at a credit score, they review other aspects of your finances that demonstrate responsibility. Once approved, the loan is reported to Experian and TransUnion, which can help you build credit.
Welcome To Credit-building in the U.S.
As you settle into your new home, we hope things go smoothly; your suitcases don’t get lost, your neighbors are sweet, and you find credit-building simple.
Whether or not you have an SSN or even a bank account, you can start to build or rebuild your credit. Although it may feel like there are people out there who don’t want you to re-establish yourself in the U.S., there are just as many or even more who want to help make things easier.
Extra wants to help everyone establish credit, no matter their current credit status. Whether you use the Extra Debit Card or one of the many other tips the Credit Wizard has offered, we wish you a successful credit-building journey and the most awesome-est of experiences in the U.S.