In case you have just shifted to the US and need to start building your credit score in the country, you may find it a tedious process. However, as tough as it may appear, it is not as complex as it may seem. Here are few tips that shall make establishment of credit in the US an easier job than you expected:
Points to Remember
- Right at the outset, you should remember that there are three separate credit reporting agencies in the country that function independent of each other. These are not federal bureaus and thus are competitive bodies. They are the Experian, Equifax and TransUnion.
- Moreover, the credit history you already have on your name from your origin country is non-transferable to the USA’s agencies. This is because one cannot lawfully access to such information cross-country. So in short, you need to start taking the same baby steps all over again.
SSN- Of Vital Importance
In the USA, the Social security Number is of utmost importance. Find yourself a permanent residence and then apply for the SSN. This is the number that helps you begin credit establishment in the US. Despite the fact that other identification details may suffice in helping agencies start creating a credit record or file, it is impractical to do so. SSN is vital for all lenders to check on applicants and credit without a valid SSN counts as not existent on the credit report.
However, it is important to know that the SSN cannot be given only for credit purposes. The authorities have clearly stated that in absence of an SSN you may not furnish it, in spite of banks and other authorities asking the same.
The credit reports in the US contain all transaction and loans you have on your name. There are both positive as well as negative entries. This is a marked contrast to countries where only negative information makes its way onto the report.
As soon as you get a loan from any institution, you begin building the credit history. Getting your hands on a secured loan from a bank in the US is the easiest and perhaps, the safest way to build the credit history. In case such a loan is applied for, the deposit you have to put acts as a security against the loan. Make sure that the loan is one, which would be reported to the concerned credit agencies. Most often, the bank where you hold the savings account willingly extends a secured loan.
Credit cards can help
While credit cards have been rated as a much taken for granted, they can actually help you build credit. However, as an immigrant you may have to go in for a secured credit card. This refers to a card where there is a collateral given as security. There is also a limit in tune with the deposit on the card. However, the reason why this would be a great choice is that the secured credit cards report to the major credit bureaus.
A bit of Luck
Sometimes you may get lucky. If you hold a credit card in your origin country from a leading company, there are chances they have a US branch too. They might just give you a credit card that is based in your new country. Moreover, having family members in the US can get you a worthy cosigner on getting new loans or accounts. If they are willing to take responsibility for your lines of credit, then nothing better could occur. However, you must be very responsible in making payments on time in this case.
This responsibility is required in paying any other loan as well and on time. It is not enough that you just set up credit; you also need to have a good history over time. A great history is not a one-night occurrence. It may take years. The longer the history, the better chances of having a great credit score. There are no backdoors and shortcuts to the process of establishing credit as an immigrant.