A credit history in the US is a must for anyone who has just come here. The credit score matters when you apply for a credit card, an apartment, a lease, or even an offer to purchase a house, so it has a lot to do with who gets your credit card, what rates you get, and more. If you don’t have a credit history in the US, then higher security deposits for rental properties could be your only option or you could be denied credit.
But it can be hard to establish credit on the ground if you’re a new arrival to the country. It’s often a matter of going through the maze of credit products, rates, and fees. Here are a few quick, easy steps you can follow to get your credit building in the US.
1. Move Your Foreign Credit History to the US
Getting credit in the US is easiest when you can export your credit record from your country. You can do that by using platforms such as Nova Credit which ties up with foreign credit bureaus to set up a Credit Passport.
Your credit history overseas gets translated to US lenders with Nova Credit, enabling you to apply for credit cards, loans, and financial services more easily. It is a service that removes the obstacle of starting from scratch. But, remember that your credit report won’t automatically be refreshed in U.S. credit bureaus but will be reviewed by the companies that work with Nova Credit. This means you will be able to start accruing your U.S. credit history after creating a local account with your foreign credit.
Today, Nova Credit works with credit bureaus in countries like:
- Australia
- Brazil
- Canada
- India
- Mexico
- Nigeria
- South Korea
- United Kingdom
2. Get a Secured Credit Card Apply for a Secured Credit Card
If you can’t move your credit report, one of the easiest ways to accumulate U.S. credit is to get a secured credit card. They ask you to pay a cash deposit which will be your credit limit. You will be able to spend $500 for instance if you deposit $500.
Wichtig: You should have your secured card issuer send a report of your payment history to at least one of the big credit bureaus (Equifax, Experian, or TransUnion). You won’t build your credit if the card issuer doesn’t file with the credit bureaus. You should always read the card terms or reach out to customer support so they know that you are being reported on payments.
Most lenders will require a Social Security Number (SSN) to apply for a secured card but may accept an Individual Taxpayer Identification Number (ITIN) or another identification like a passport or state-issued ID. Some banks and credit unions will be more liberal with what they will take, so make sure to go in person to a branch to see if you can get approved.
3. Develop a Relationship with a Bank or Credit Union.
A second essential component of US credit-building is becoming a bank or credit union member. An account in the form of a checking or savings account helps demonstrate your ability to pay on time and will be a way for you to get credit services with that bank later.
Think of the following before choosing a bank:
- Accessibility to ATMs
- Customer service reputation
- Monthly fees or maintenance charges
Advice: Once you have opened an account, don’t overdraw your account since it will show up on your credit report. If you are healthy financially, you want to be on good terms with your bank.
4. Co-sign on to Credit Request.
If you can’t quite get approved for a credit product on your own, you can try applying with a co-signer. Co-signer: This is a credit card to which you have already built a U.S. credit score, and will pay the debt if you aren’t making payments.
This will make you a better candidate for a credit card, loan, or even a car lease. But make sure your co-signer knows what they’re signing up for. In case you don’t pay your bills they are responsible for the debt.
Search for co-signer credit products before applying. Tell your co5. Make Payments on Time, Watch Your Credit, and Take Your Time.
- Once you have a credit product (for example, a secured cre-signer you’re taking on, pay every month on time to save their credit and yours.
- dit card or loan), you will build your credit record. Remember most of all to pay on time. Punctual payment is the secret to good credit.
Here are some credit tips to keep your credit in order and get you on the right track:
- Pay your bills on time so you appear as a responsible debtor.
- Credit card at least once per month to prove you are capable of handling credit regularly.
You want your credit use low, no more than 10% of your credit limit. So for instance, if you only have $500 in your card, don’t carry more than $50 in your account.
AutoPay for your bills, so you won’t forget about the due dates.
Several months of regular payments and you’ll be in the U.S. credit system. You’ll be able to obtain other credit cards more easily, for example, an increased credit limit or an unsecured card. A lot of financial apps (Credit Karma, NerdWallet) provide your credit score and credit monitoring for free. They can even connect you with better credit card offers when your credit scores increase.
Developing credit in the U.S. might take some time, but it is doable with a bit of patience and persistence. You may also attempt a credit transfer with Nova Credit if you have a credit history in another country. If not, then get a secured credit card, bank account, or co-signer to get you going. Never pay late and always check your credit score.
