8 Ways to Build Credit If You’re New to the U.S.

Ways to develop credit

8 Ways to Build Credit If You’re New to the U.S.

You likely don’t have a credit report or rating if you are new to the United States, even if you have good credit before emigration. Credits from other countries will not be transferred to the U.S. credits system, so you will build a new credit profile from scratch when you arrive. In the United States, credit may be more important than your country or region; therefore, you need to consider it as soon as possible. 

Eight ways to start building credit in the U.S

You can employ the following steps to start creating and earning points after arriving in the United States. 

1. Become an approved user of someone else’s credit card

Your friends or family members in the U.S. who have a credit card can add you to their account as an authorized user. The card issuer can report the account to the credit bureau on your behalf. Inquire before getting connected because some issuers may not notify the authorized users.

You can also get a card associated with your account, so you can use it to make purchases (with the cardholder’s consent), but you shouldn’t expect to use it to build credit. Your credit report shows how the primary cardholders manage their account. Therefore, make sure you always pay your bills on time and maintain a low balance.

2. Open a secured credit card account

Another alternative is to open a credit card by yourself. It may not be easy to qualify for certain cards when you do not have a credit history, but you still have options. For instance, you can transfer the refundable deposit to the card issuer with a secured credit card. You can send them $200 to get a card with a credit limit of $200. You are still required to make monthly loan payments on time to avoid delays on your credit. However, deposit restrictions place card issuers at risk, making it easier to receive approval for a secure card. 

3. Get a Credit-Builder Loan

The lending institutions offer credit-builder loans specifically to help people build credit. The money may be secured in a locked savings account after getting approval for the loan. After that, you repay the loan with interest, and the lender reports your payment to the credit bureau. Finally, your saving account will be unlocked, and you will be able to use the funds when you complete the loan repayments. 

4. Use a Lending Circle

Another option is to secure an interest-free loan through a credit circle organized by a community. Every month, all members pay the loan, one member receives the total loan amount, and the company reports the loan activity to the credit reporting agency. Mission Asset Fund is a non-profit organization that facilitates lending circles and has a database that you can use to find other options in your state.

5. Search for accounts that use alternative underwriting methods

Some credit card issuers and lenders approve new invoices based on information that does not come from credit reporting agencies. For example, some cards allow you to link checking accounts and get approval based on your bank history. (You must be a legal or permanent resident of the United States and have a phone number and email address.) These are all excellent choices when opening a bank account in the United States.

6. Try to Build Credit from Your Home Country

In some cases, you can use a loan in your country to acquire credit quickly in the United States. International banks and credit card providers such as American Express, BNP Paribas, and HSBC have developed plans for customers traveling to the United States. Search for various suggestions or options once you have established a relationship with an international financial institution. Furthermore, Nova Credit, an American company that helps people in certain countries use their credit to secure credit cards, loans, and American housing facilities.

7. Consult Your Employer and Local Community Banks and Credit Organizations

Large employers can cooperate with financial institutions to facilitate overseas employees’ access to banking and credit services. It is essential to consult your human resources department to check if such resources are available. In addition, consult local community organizations and other immigrants about local banks or credit unions to provide specific plans. 

8. Add More Accounts to Build Your Credit Cards

Certain types of payments are generally not reported to credit bureaus, including rent. However, you can sign up for a lease reporting service and use your rent payments to create or build your credit reports.