To begin to build credit in the US as a novice might seem overwhelming. But it’s a good way to be financially stable, get approved for a loan, live on your own, etc. This is our U.S.. credit building guide to teach you everything you need to know about building credit in the U.S. — from getting your US credit score to getting your first bank account, debit card, and credit card.
What Is a U.S. Credit Score?
A credit score in the US is a value between 300 and 850 which indicates to lenders whether you are going to pay back money you have borrowed. The greater the number, the more desirable your credit score is to any potential lender (whether it’s a bank, a credit card company, or even a car rental company).
Here’s how credit scores are usually broken down:
- 580-669: Fair
- 670-739: Good
- 740-799: Very Good
- 800+: Excellent
Credit bureaus assign you a score in slightly different ways, but most will do it based on your history in the US, including any bank accounts, phone agreements, and loans you’ve taken out and paid off.
How Can I Get a U.S. Credit Score?
If you have a good credit score, you have a lot of doors to knock on in the US. Listed below are just some reasons your credit score is important:
- Getting a house or apartment: Most landlords take credit scores on their tenant application.
- Contracts for phone service: If you have a bad credit history, you may be required to make a large security deposit.
- Loan approval or credit card approval: You’re going to get approved much easier with a good credit score and possibly higher credit limits.
- Cheaper insurance: Car and Home insurance premiums are cheaper with a higher credit score.
Did I Already Have A U.S. Credit Score?
You probably have no credit in the U.S. If you’ve only recently landed in the US, you probably haven’t had one yet. Even if this will put lenders off evaluating you for reliability, remember that no credit doesn’t equal bad credit. Once you get started building a history in America, you can get good credit.
You can do a credit score check by contacting one of the three major credit bureaus — Experian, Equifax, or TransUnion — or you can use an online third-party check provider. Note that, if you are foreign and don’t have any credit history in the U.S., it could take up to three months for your score to be established.
How Do I Acquire Credit In The U.S.?
Your credit score is determined by how you conduct your money, so the quickest way to get credit started is to keep an accounting account. You do this by opening a bank account, getting a debit card, or applying for a credit card. Here’s how you can start:
Set up a bank account:
This is one of the quickest ways to get started with your credit history in the U.S. You can get a basic account with a debit card at almost any bank. It is the account you use for your everyday business like bill paying and getting paid.
Get a credit card:
Once you’ve opened a bank account, try applying for a credit card. Responsible credit card usage is the fastest and best way to increase your credit score. Just make sure to pay your balance in full as well so that you won’t incur late fees and get your score. This payment is a security in case you don’t pay. What you can charge to the card is usually a deposit of either $200-$2000.
How does it work?
- Your deposit (which becomes your credit line).
- You pay for the card like you’d use a credit card.
- You will see your credit score starting to climb if you are regular on your payments.
- If you’re a good user for a few months, you may be able to move up to an unsecured card without a deposit.
Top Tip for Credit Building
Choose a deposit amount you are comfortable with when you apply for a secured credit card. You can bet on a lower deposit limit since you are still new and want to make sure that you will regularly pay it back.
Sable Card for New Users
For someone looking to get a bank account in minutes and begin earning credit, Law and Visas suggest Sable Cards. This card has a 5-minute application process online that doesn’t require an SSN, ITIN, or credit. With Sable you get a bank account and a secured credit card, plus cashback, free car rental insurance, etc.
Benefits of Sable Card:
- No charge on basic banking products (no account renewal fee, ATM fee, or overdraft fee).
- No exchange rates for foreign money.
- Cashback and rewards on purchases.
- If you choose a Sable Card, you can start your credit score-building process without the standard hurdles like having to have an SSN or having credit in the US.
Building credit is overwhelming for a first-time visitor to the United States, but it’s an essential part of financial freedom. If you do what I’ve just explained — set up a bank account, make smart choices with a debit/credit card, and pay on time — you’ll be well on your way to establishing a good credit history and earning a decent amount of money here in the U.S. Whether you apply for a secured credit card or open an account with a bank that has lax rules for first-time users, just get started early and stick with it.
