How to Build Credit as an Immigrant
As an immigrant, you come to this country with no credit history. Without a credit history, it may be challenging to make big purchase such as a car or a house. The following are tips that will help you build your credit history as an immigrant in the United States.
- Open a credit card account. You may be unable to get a regular credit card. If that is the case, get a secured credit card and work your way up to a regular credit card.
- Use the credit card for small purchases every month and completely pay off the balance at the end of each month. Setting up automatic payments may help you make payments on time every month and not fall behind.
- If you have a current credit card that was issued in your home country, you may be able to talk to the credit institution and have them issue a United States credit card.
- If you have a spouse that has an established credit history in the United States, you can have them add you as an authorized user to their credit card(s). Also, you can jointly apply for loans with your spouse, which will boost your credit score.
- Find institutions that are willing to lend to immigrants. Some financial institutions will be more favorable towards immigrants. You might be able to purchase a car or something similar using a loan from such institutions. Even if you have the necessary funds to fully pay for the purchase, choose to make a down payment and take out a loan for the remaining amount and pay it off over a period of months. While interest rates may be higher than usual for such a loan, it is a great way to build your credit history.
- Rent out an apartment with a landlord that reports rent payments. If your landlord does not report rent payments, you may be able to set up electronic payments that are automatically reported, if your landlord agrees to the arrangement.
- Monitor your credit score closely. Monitoring your score will give you insight into what else you need to do to boost your score. There are credit reporting agencies such as Equifax or Transunion that you can pay a monthly fee to so that you can have access to updated credit reports every month.
- Diversify the types of credit you have. Make sure to have a combination of credit cards, loans and mortgages.
- Make timely payments every month. A late payment, if reported, will negatively affect your credit score and be on credit history for a number of years.
Being an immigrant is a challenge. You are in a new country starting afresh. We, at Kriezelman Burton & Associates, LLC understand the challenges and are ready to help you with any immigration issues you face.