Credit-building tips for new US citizen
Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families." She writes "Opening Credits," a weekly reader Q&A column about issues for people who are new to credit, for CreditCards.com.
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Dear Opening Credits,
I will be moving to the U.S. with my family pretty soon and would
like to know the best way to start building my credit score. I have been
traveling to and from the U.S. in the past year setting up my business (as a
nonimmigrant under a business visa) during this time. I also got a credit card
approved by a U.S. bank. I did not have a Social Security number at the time so they approved the
credit just with my passport and business information.
Now I have a work visa
and an SSN and would like to know if this credit account will be linked to my
score or if I must request a new card and start from scratch. Is there any U.S.
credit bureau for non-U.S. citizens who have credit with U.S. institutions?
I´ve used the card for almost a year and have managed it well, so I think it
would help me in a positive way. What I would like to know is if all the
transactions and credit history I have from the time when I did not have an SSN
will be taken into consideration for any new credit I wish to open now that I
have an SSN. Or does none of that help? Thank you. -- Jorge
to America -- and to your credit scores. You've probably already got them, so
now all you have to do is take steps to ensure that the numbers are moving in
the correct direction: upward.
The credit card you opened with your passport and business tax ID, and future accounts that you
start with your Social Security number should be on the same credit reports -- and factored into
your scores -- without you having to do anything.
presume you used a Tax Identification Number (TIN) that the Internal Revenue Service
issued to you to open your credit card. Some United States banks and financial
institutions accept them in lieu of Social Security numbers. Your credit
history -- and thus your credit scores -- should have begun the day you applied for the
account. However, if after following the suggestions below, you do not find that your current card issuer is reporting your card activity to the credit bureaus, all you have to do is call your card issuer and request that it do so.
This is what you need to know:
What the credit
reporting bureaus do.
There are three major credit reporting bureaus in the U.S. -- TransUnion,
Equifax, and Experian. There is no specific bureau geared toward those new to the country. Their task is to receive all of the information that is
sent to them by subscribers (such as banks, credit unions, collection agencies
and the courts), and then sort it all into readable files called consumer
can access free copies of your credit reports from AnnualCreditReport.com to
find out how your credit card is being listed. You should see that it indicates
when the card was opened, how much you're allowed to charge, what your current
and highest balance is and your payment pattern. Checking your reports at least
once a year to make sure they are accurate is a good idea as it can help you detect and dispute errors as well as reveal any fraudulent activity.
Credit scores are derived from the borrowing and repayment activity that is
listed on your credit reports. The most common score is called the FICO, and it
ranges from a low of 300 to a high of 850. Scores in the mid-700s and above are
desirable because they get you the best rates when you borrow.
scores weigh some factors heavier than others. Timely
payments and how you manage your debt load are the most important. If you
always pay on time and keep your balance well below your credit limit, you're
more than halfway toward a great score. Do so over several years and with
different types of credit products (but without applying for new credit
aggressively) and your scores will surely be in the positive zone.
can pay about $20 to get your FICO score from myFICO.com. Knowing what your
numbers are now will help you develop a plan to increase them if they're on the
low side of the spectrum.
How to improve
your reports and scores. Now that you have a Social Security number, a
business and an established credit history, a larger world of credit is at your
doorstep. You have one card; you may want to consider looking for another.
you've pulled your reports and scores, you'll know what kind of credit risk you
are and can pursue the best card account for someone in your credit score range. You can use CreditCard.com's CardMatch
tool to see current
offers. Just remember to read though the terms carefully. When you've identified the product
that seems right, apply and then wait for a response. If you're approved,
wonderful! Charge, but pay on time and in full. With two cards in action, your
scores will soar. In the event you're denied, keep using the account you do
have in a positive way, giving yourself more time to build your rating. Then
try again in about six months. It won't be long until you're every issuer's dream customer.
See related: FICO's 5 factors: The components of a FICO credit score
, New citizen tips for building good credit
Erica Sandberg is a nationally renowned personal finance authority. She’s host of several financial web shows, and a frequent guest for media outlets such as Fox, Forbes, Nightly Business Report and NPR. Erica previously was affiliated with Consumer Credit Counseling Service and was KRON-TV’s on-air credit expert. Her book, "Expecting Money: The Essential Financial Plan for New and Growing Families," was published in 2008 by Kaplan Press.
Send your question to Erica.
Published: May 22, 2013