Building a Credit History when You're New to the United States

One of the things an immigrant to the United States quickly learns is the necessity of getting credit. You may have credit in your home country, but this is not a transferable entity and credit in the US must be built from the ground up.

It's one of the most difficult concepts to get one's mind around - if I don't have a credit history, I can't get credit and if I can't get credit, I can't build a credit history.

The reasons for wanting to build a credit history are as varied as the reasons people come to the United States. For people entering the US on limited term visas, it's important to build a history as quickly and as positively as possible.

For instance, if you're in the United States on a Exchange Visitor Visa (or "J" visa), you will have a limited amount of time in the US in which to rent an apartment, get a car, or obtain any other host of items. Getting an apartment, for instance, will sometimes require a credit check by the landlord. Often times an absence of credit history could be just as bad or worse than having a bad credit history: when and if credit gets issued, it will be more expensive.

Your first lesson, though, is not to apply "willy nilly" for credit - each time you apply for credit, a note is made on your now blank slate credit file. Too many inquiries lowers your credit score and makes it less likely you will get credit elsewhere. A vicious cycle for sure.

YOUR FINANCIAL INSTITUTION & MAJOR CREDIT CARDS

If you have not chosen a bank yet, one recommendation would be to join a credit union. A credit union is like a bank, but depositors in a credit union are actually the owners of the credit union. It is a cooperative organization where the members control the decision making of the financial institution though votes of the membership. Given this, one can usually expect somewhat easier terms of credit, more favorable rates, and are generally more interested in each individual "investor/member" than for-profit banks.