How Immigrants Can Get Credit Cards and Build Their Credit History in the U.S.

With the right steps, immigrants can get credit cards and build credit history in a new country to help meet their goals.

The United States is a land of various opportunities. Many people come here to meet their dreams. But, many immigrants in the U.S. face a difficult financial situation due to not having a credit history. They struggle to build their identity in a new country where they have to find a way to stay to meet their goals.

Read below to learn more. And for more support, book a free 30 minute consultation with us here: http://immigrantfinance.com/consult 

Why Immigrants Need to Build Their Credit History in the USA

Without a U.S. credit history, it is difficult for immigrants to get a credit card, rent a house, or even buy a car. There are many immigrant students who are not able to buy a cell phone because they have no U.S. credit history.

Immigrants often need to build their credit score to get approval for a loan, to buy a car, or to rent an apartment.

The first thing that the immigrants have to do to build a credit score and history is get a credit card. It will help them to establish their credit history.

How Can Immigrants Get a Credit Card?

Using a U.S. credit card is the best way to build credit. However, it is very important to make credit card payments on time or else it can hurt your credit score and make you risk going into credit card debt.

Your immigration status, depending on what it is, may make it difficult for you to get a credit card. If possible with your immigration status, you should try to get a valid social security number (SSN). If you are not able to get a social security number, you can consider applying for an ITIN (individual taxpayer identification number). Visit the IRS website and read about how to get an ITIN.

Many US credit card companies will not issue a credit card to someone who has recently arrived with no local credit history, but there are some cards that will evaluate applicants based on other factors like past and current employment, not just their credit score. 

Here are some additional ways immigrants can get a credit card in the US:

1. Open a bank account in an international bank in the US

If your family members or you have an account in an international bank in your home country, then you can open a new account with the same bank in the U.S. You can get a debit card from this bank. Opening a checking or savings account can help you to get a credit card later on.

2. Show evidence of positive credit in your home country

Try to apply for a credit card in person at a local bank or credit union in the U.S. Provide evidence of your credit score that you have earned in your home country. It can help you to get approval for a credit card.

3. Visit a bank to open checking and savings accounts

If you are an immigrant and want to establish U.S. credit, then you can try to open checking and savings accounts. You can open a bank account in a large national bank such as Bank of America, Capital One, or Chase. You can choose a a credit union or smaller regional bank as well. Consider whether the bank has enough ATMs in your area so that you don’t have to use others bank’s ATM machine and face fees to take out money. Try to save money in the savings account and make sure not to overdraw your checking account.

4. Find a co-signer

You can try to find a co-signer to help you can apply for a credit card. Sometimes, getting a co-signer can be difficult for immigrants. You can think about requesting that a close friend or a relative who has been in the U.S. for a long time become a co-signer. Once you find a co-signer, you need to find out a credit card issuer that provides a credit card with a co-signer.

5. Get a job

Before giving you a credit card, credit card issuers will likely ask you whether or not you have a job. Thus, having a job can help you get a credit card. If you have trouble getting a job, it is recommended to get a seasonal job or volunteering position to start building a resume to start earning some money. If you are a student, then you can get a campus job after completing your studies, if your immigration status allows it.

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How Can Immigrants Build Their Credit History Without a Credit Card?

Building a credit history is important for setting up your life in the U.S. Once you get an American credit card, you can build a credit history. But getting an American credit card can be difficult, especially if you do not have immigration status. Here are some other ways you can build a credit history without using a credit card.

1. Get a secured credit card

Being a newbie in a country, your first challenge is to build a credit score. On the other hand, getting a co-signer can be difficult for you. Thus, immigrants can start with a secured credit card so that they can build a credit history without using a traditional credit card.

In a secured credit card, the issuer gives you a credit card once you deposit a certain spending limit. You need to deposit the money in your bank account beforehand to get the credit card. The deposited cash will play the role of collateral and the spending limit. The issuer will verify whether or not you have a good income before giving you a secured credit card. If you maintain the secured credit card in a proper way, you will be able to build a credit score with time and eventually seek a regular credit card.

However, you should ask the credit card issuer whether or not they report the payment history to at least one credit bureau. Otherwise, you will not be able to build the credit score.

2. Pay your rent on time

Paying rent can help you to build credit because the landlord can report your payments to the credit bureaus. You can also pay the rent through an electronic rent service that reports your rent payments to the Experian’s Rentbureau. By doing so you can build your credit more quickly.

3. Stay away from debt

Being an immigrant, you should not live your life beyond your means. Falling into debt can destroy your dream of building a credit score in the U.S. And without a credit history, it is difficult to build a life in the United States. If you get a credit card, then make sure you pay the credit card bills in full and within the stipulated time each month. If you are already in debt, then try to pay off your existing credit cards debt as early as possible. You can enroll with a professional debt relief company to repay your debts quickly.

4. Pay your utility bills on time

You should also pay your utility bills on time to build a good credit record. You can ask the provider to report your payment record to the credit bureaus.

5. Get a credit builder loan

Credit builder loans, or savings secured installment loans, help people to establish a credit history. They arrange the loan from their banking partners and provide the loan to qualified immigrants and people with valid SSNs. You can build a credit history by making payments on the credit builder loan.

6. Try a credit card designed for people new to credit

There are several new credit cards on the market that immigrants and individuals without credit history in the United States can apply for. 

Financial life can be overwhelming for immigrants when they first come to the U.S. Being an immigrant, you can face difficulties and rejection from lenders, credit card companies, and employers.

Initially, the whole process can be frustrating. But if you are determined to establish your credit history in the U.S., you can follow some of the steps to work toward building credit as an immigrant.

Want to know what\’s next for personal finance planning as an immigrant? Not sure where to start?

Not sure where to start?

  1. Subscribe to the Immigrant Finance Podcast to learn about personal finances, creating online businesses, and building wealth for immigrants and their families.

  2. Join our Private Community Group “Building Wealth for Immigrant Families” and access a network of supportive, financial-oriented immigrant families as well as receive our complimentary trainings on finance and online business  

  3. Sign up to receive our weekly Friday newsletter with resources for immigrant families building wealth  

  4. Apply to join Immigrant Finance School™, our personal finance and online business group coaching program for immigrant families building wealth

Thank you to Patricia Sanders for contributing to this post

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