5 Tips to Build Credit as a New Immigrant
The land of the free, the home of the brave, and a place where it can be next to impossible to establish credit without already having credit. While you’re shaking your head at the seemingly catch-22 scenario, keep in mind that while it can be difficult to build credit as a U.S. immigrant without any pre-existing credit, it can be done. Credit card companies and financial institutions can be made to listen, but you need to take the time to prepare yourself, and have important documents at the ready.
5 Don’t Take “No” for an Answer
Without a pre-existing credit history, don’t be surprised if many credit card companies and financial institutions turn you down for credit cards and loans. If this happens, appeal the decision. If you have a decent income, prove it with pay stubs. If your employer and even your landlord are on good terms with you, don’t be afraid to ask them for letters of recommendation based on their own financial dealings with you. Additionally, if you have good standing with creditors in the country you came from, get copies of any glowing statements and reports, translate them into English if necessary, and show them to the creditor or bank with which you want to establish a credit card or loan. Take the time to build your case and then argue it, and you just may be rewarded with the credit card or the loan you’ve been asking for.
4 Apply for a Secured Credit Card
A secured credit card is essentially a pre-paid, pre-loaded debit card, but with a lot more fees (some secured credit providers charge up to half of the card’s available balance as an activation fee), as well as the possibility to build your credit. Here’s how it works: in exchange for a credit card that is in your name, you “load” the card with funds. These funds are then yours to spend, and then pay back. Over time and usually within the first six months of regular activity and on-time payments, the credit card company will begin to report your activity to the three major credit card reporting companies, Equifax, Experian, and TransUnion.
3 Get Added to an Existing Credit Card
Find a family member or friend who is willing to give you access to their credit card via an authorized user card. Typically, many credit card holders can add authorized users to their account without identification, and riding on the coattails of a friend’s good credit is a great way to start building your own. Just don’t make any unauthorized purchases, or your up and coming credit score could be overshadowed by a court judgment for theft.
2 Apply for a Credit Card
With your legal citizenship documentation in hand, check with the major credit card companies—Bank of America, Capital One, Chase and Discover, to name a few—to find out what types of identifying documents they require for an application. Some may require traditional identification and a social security number, while others may accept a foreign-issued driver’s license or passport. There is also the possibility of applying with a co-signer—essentially someone who agrees to put his credit on the line in order to help you build yours. However, check with credit card companies first to find out their requirements: There’s no use in applying for a credit card before you know what’s required of you, since multiple applications will tarnish your non-existent credit score.
1 Be Legal
It goes without saying that if you’re an illegal immigrant, you’ll not only have trouble obtaining a credit card, but you may also encounter difficulties with staying in the country if you’re discovered by authorities. Follow the U.S.’s immigration process to the letter, which includes having a sponsor (a U.S. citizen or lawful permanent resident who essentially vouches for you being in the country) and filing a petition. After you spend a small fortune and sign away your first, second, and even your third born in exchange for citizenship, you’re ready to build your credit.