If you have just moved to the U.S. from another country, there is good news and bad news. The good news is that you are starting another chapter in your life, and your future may be full of countless opportunities and endless possibilities. The bad news is that you may have to start from scratch with your credit history.
Establishing your credit in the United States will not be that difficult. If you had a good credit history in your home country, then you already possess the good habits and discipline required to build the kind of credit you want. With a little work, it will probably take you about six months to have a solid FICO score if you take a few proactive steps.
A Quicker Path to Establishing Credit
If you did have a good credit history in your previous country, the prospect of having to start all over may seem disheartening. And while it is an inconvenient situation, you have to keep in mind that there are legal, contractual and technical reasons that prevent a person's credit report from being transferred between countries.
How do you get a good credit score in the U.S.? Basically, you use credit responsibly by paying your bills on time and by not overusing credit cards. Having a balanced credit mix is also a smart thing to do. This means that you maintain equal amounts of revolving credit (credit cards) and installment credit (loans).
Secured Credit Cards
At first, with no credit history in the U.S., it may be difficult to get a "regular" credit card. However, you can build your credit just as easily with a secured credit card. To open one of these, you simply deposit a certain amount of your own money into an account, and this dollar amount becomes your spending limit.
After making your deposit and receiving your credit card, you can use the card to make purchases. Then, you simply pay your bill on time every month and watch your credit score gradually increase. Over time, and with consistent payments, you may eventually be able to transition over to an unsecured credit card with a larger spending limit.
Having Your Rent Payments Reported
Another option you have available, if you're a renter, is to have your rent payments reported to the credit bureaus. There are services, like our trusted partner Level Credit, that report your rent payments. This gives your credit score a boost, as your payment history is the largest factor that makes up your credit score.
Rent is one of the biggest expenses in many people's budgets. It only makes sense for you to get credit for staying on top of it.
Special Financing for Car Buying
Depending on where you have come from and where in the United States you are now living, you may be surprised by how important it is to have access to a car. In many of the larger U.S. cities, public transportation is sufficient enough to get you through daily life. However, if you live out in a suburb or in a more rural area, you will probably need to own a car. And while it may seem easier to just buy an inexpensive vehicle with cash, financing a car is the better choice.
First of all, when you pay cash to a private seller for a very inexpensive car, you may end up with an older vehicle with a lot of mileage on it, and it may not be very reliable. The vehicle could frequently break down on you and cause you to miss work, and the associated repair bills might cost you a lot of money. On the other hand, you can finance a new or later model used car and get a vehicle that you can depend on and an opportunity to build your credit.
Improving Credit with Timely Payments
When you pay for a car with an auto loan, you make monthly payments until the loan is paid off. And if you make these payments on time, every time, you will build a positive credit history. In fact, if you practice other good credit habits while paying for your car loan (a type of installment credit), you should notice a significant improvement in your credit score when you reach the end of your loan term.
But how can you get approved for auto financing when you have no credit history in this country? Luckily, there are special finance lenders who are able to look beyond your credit in order to approve you. So, if have a stable, permanent address, a driver's license and a job with a regular, verifiable income, you can typically get approved for an auto loan.
Easy Auto Financing for New U.S. Residents
If you are ready to buy a car and start building your credit, Auto Credit Express can help. You don't have to spend hours looking for a car dealer who is connected to the right kinds of lenders. When you apply with us, we can quickly connect you with a dealer right in your area. And this dealership will be able to work with unique credit situations. And our service will cost you absolutely nothing.
All you have to do is fill out our simple and secure online car loan request to get started today.