When you first arrive in the United States, one of the biggest challenges can be starting from scratch with your credit history. It used to be that newcomers couldn’t bring their international credit report or credit score with them, meaning even those with strong credit histories in their home countries would have to rebuild their U.S. credit score from the ground up. This process could take years, making it difficult to access basic services like credit cards, loans, apartment rentals, or even a cell phone plan.
In the past, banks and credit bureaus in the U.S. didn’t have the technology or systems to understand or transfer international credit scores. This created a barrier for many immigrants and newcomers, preventing them from accessing credit until they built up a U.S. credit score.
Transfer Your International Credit History to the U.S.
Nova Credit has developed technology that translates credit data from countries like Australia, Canada, India, Mexico, the UK, and several others into a U.S.-equivalent credit score. This means that if you have a solid credit history in your home country, you can use that information to apply for U.S. credit cards, loans, apartments, and other credit products.
Once you apply for and receive your first U.S. credit product using your international credit history, you can begin building your U.S. credit score. This is a huge advantage because it allows you to get the credit you need sooner, without waiting for years to establish a U.S. credit history.
How Does It Work?
Nova Credit’s system works by taking your credit report from your home country and converting it into a U.S.-compatible score. Here’s how it works step by step:
- Access Your International Credit Report: Through Nova Connect, you can easily access your credit report from the credit bureau in your home country. This user-friendly interface guides you through the process.
- Translation of Your Credit Data: Nova Credit then takes your international credit history and translates it into a U.S.-equivalent credit score. This score can be shared with U.S. companies when you apply for credit.
- Get Approved for U.S. Credit Products: Once your data is translated, U.S. businesses, such as banks and credit card companies, will use this information to approve you for credit cards, loans, and other products.
This system allows you to apply for U.S. credit products right away, without needing to build a U.S. credit history from scratch.
What Happens After You Get Approved for Your First U.S. Credit Card?
Once you receive approval for your first U.S. credit card or another form of credit, the three major U.S. credit bureaus—Experian, Equifax, and TransUnion—will begin reporting your credit activity. These bureaus will track your payments and credit usage, helping you build your U.S. credit history over time.
It’s important to know that all of Nova Credit’s lending partners report your credit activity to at least one of these credit bureaus, which means that every time you use your credit card responsibly, your credit score will improve. Over time, you can build a solid U.S. credit history, which will open doors to more credit products, better interest rates, and increased financial opportunities.
Nova Credit Helps You Build Your U.S. Life
For many newcomers to the U.S., a lack of a domestic credit history can make it difficult to achieve their financial goals. Without access to credit cards, loans, mortgages, leases, or even phone contracts, setting up a new life can be a huge burden.
Whether you’re applying for your first credit card or a loan, using your international credit history to get approved is a game-changer. We believe that everyone deserves the opportunity to thrive in the U.S., and we’re here to help you every step of the way.
What If Your International Credit History Isn’t Available?
While many of our partners, such as Deserve or Petal, currently work with Nova Credit’s data, there are still some credit card issuers and lenders that do not yet use this system. Even in such cases, newcomers can still access credit products specifically designed for individuals without a U.S. credit history.
If Nova Credit’s technology is not yet available in your country, you can still apply for credit products with these specialized lenders who understand the challenges faced by new immigrants.
The Role of Credit Bureaus in Accepting International Credit History
Navigating the U.S. credit system can be challenging for newcomers, especially for those with established credit histories in their home countries. Understanding how U.S. credit bureaus accept and process international credit data is crucial for individuals looking to build their credit profiles in the United States.
Which U.S. Credit Bureaus Accept International Credit Data?
In the U.S., three major credit bureaus—Equifax, Experian, and TransUnion—primarily handle consumer credit data. However, they traditionally do not accept international credit histories directly. Instead, companies like Nova Credit have emerged to bridge this gap by translating foreign credit histories into a format that U.S. lenders can understand.
Impact on Your Credit Profile
When international credit data is accepted, it allows newcomers to leverage their existing creditworthiness. Nova Credit, for instance, partners with various international credit bureaus to create a “global credit passport.” This document includes:
- Personal information
- U.S. equivalent credit score
- Repayment history
- Employment history
This means that individuals can apply for U.S. financial products using their international credit history, helping them avoid starting from scratch.
Check if Your International Credit History Appears on Your U.S. Credit Report:
To verify whether your international credit history has been integrated into your U.S. credit report:
- Obtain Your Credit Report: Request a copy of your credit report from the three major bureaus (Equifax, Experian, TransUnion) through AnnualCreditReport.com.
- Review the Report: Look for any entries related to your international credit history or any accounts that may have been imported.
Take Action If U.S. Bureaus Are Not Considering Your International Credit Data:
If you find that your international credit data has not been included:
- Use Nova Credit: If you haven’t already, consider using Nova Credit to share your international credit history with U.S. lenders.
- Gather Documentation: Collect any relevant documents that demonstrate your creditworthiness from your home country, such as bank statements or proof of timely payments.
- Apply for Secured Credit Options: If lenders do not recognize your international history, apply for secured credit cards or other products that don’t require a U.S. credit history.
Secured Credit Cards: A Tool for International Applicants
Secured credit cards are designed for individuals with limited or no U.S. credit history. They require a cash deposit that serves as collateral and typically sets your credit limit.
Why They’re Ideal for Individuals with International Credit Histories
For newcomers, secured cards provide an opportunity to build a U.S. credit profile while leveraging existing financial responsibility demonstrated in their home countries.
How to Apply for a Secured Credit Card
- Research Providers: Look for banks or financial institutions that offer secured cards.
- Complete the Application: Fill out the application form and provide any required identification and financial information.
- Make Your Deposit: Pay the required security deposit, which will determine your initial credit limit.
Benefits and Risks of Using a Secured Credit Card
Benefits:
- Helps establish or rebuild U.S. credit history.
- Easier approval compared to traditional unsecured cards.
Risks:
- High fees associated with some secured cards.
- Potential for overspending if not managed responsibly.
Working with International Banks Operating in the U.S.
Leveraging Relationships with International Banks
If you have an account with an international bank like HSBC or Barclays:
- Inquire About Services: Ask how they can assist you in establishing or transferring your credit profile to the U.S.
- Use Existing Relationships: These banks may consider your international banking history when providing services in the U.S., potentially easing the process of obtaining loans or lines of credit.
Establishing a U.S. Credit History Using International Banking Relationships
- Open an Account: If possible, open a bank account with an international bank that operates in both your home country and the U.S.
- Request Reporting: Ask if they report to U.S. credit bureaus and how they can assist in building your American credit profile.
Creating a Credit Profile Without an International Credit Report
Do This If Your International Credit Report Is Not Accepted
If your international report is unavailable or rejected:
- Alternative Documentation: Use rental history, utility bills, and bank statements as proof of financial responsibility.
- Consider Non-Traditional Lenders: Some lenders specialize in working with those who lack traditional credit histories.
Understanding Credit-Building Options for Newcomers
Newcomers can establish their profiles through:
- Paying bills on time (e.g., utilities).
- Using alternative scoring models offered by some fintech companies.
- Engaging in community lending programs that report payments to bureaus.
Using a Co-Signer or Guarantor for U.S. Credit
How Co-Signing Works
A co-signer is someone who agrees to take responsibility for a loan if you default, which can help mitigate risk for lenders when you have limited U.S. credit history.
Benefits of Having a U.S.-Based Co-Signer
- Improved Approval Chances: A co-signer with established American credit can enhance your chances of getting approved for loans or lines of credit.
- Potentially Better Terms: Having a co-signer may also lead to lower interest rates due to reduced perceived risk by lenders.
Building U.S. Credit While Waiting for Recognition of International History
Use a Co-Signer: By applying for loans or lines of credit with a co-signer, you can start building a U.S.-based credit profile, even if lenders do not yet recognize your international history.
International applicants face several challenges when attempting to utilize foreign credit reports for U.S. credit approval.
Common Issues:
Many newcomers arrive with strong credit histories from their home countries but must start from scratch in the U.S., often classified as “credit invisible” due to the lack of a local credit score. This situation complicates access to essential services like loans, credit cards, and rentals.
Legal and Regulatory Challenges:
Legal barriers significantly hinder the transfer of international credit data. Different countries have varying laws regarding credit reporting, and many prohibit the sharing of personal information across borders. This discrepancy means that even if an applicant has a solid credit history, it may not be recognized under U.S. regulations.
Discrepancies in Credit Scoring Systems:
The differences in scoring models between countries can lead to discrepancies when converting international scores to U.S. equivalents. For instance, Nova Credit offers a solution by translating foreign credit data into a U.S.-compatible score, allowing immigrants to apply for credit products without starting from zero.
Overcoming Challenges:
To navigate these obstacles, international applicants can utilize services like Nova Credit or seek specialized lenders familiar with the challenges faced by immigrants. Building a U.S. credit history can begin once they secure their first credit product, provided they manage it responsibly.
Starting your new life in the U.S. doesn’t have to mean starting from scratch when it comes to your credit. Thanks to Nova Credit, you can now bring your international credit history with you and use it to apply for credit products right away. Once you get approved, you can begin building a U.S. credit score that will help you access even more financial opportunities down the road.
How Law and Visas Can Help?
At Law and Visas, our team of expert immigration consultants is here to make your travel to the U.S. straightforward and successful. Whether you’re applying for an F-1 Visa or a 0-1 Visa, we handle every step—from preparing your application to gathering the required documents.
Our Immigration Consultants and Lawyers ensure that your application meets the highest standards, with no details missed. We’ll also keep you informed throughout the process and coordinate with the immigration office or embassy on your behalf.
Law and Visas has a strong record of helping clients secure the visas/permits they need to visit the United States. You can call us today at +234 812 5505 986 to learn how we can help you.
