How to Quickly Build CREDIT For Immigrants

 How to Quickly Build CREDIT For Immigrants & Ex-Pats in the United States (2023)

Congratulations and welcome.
You've arguably made one of the biggest decisions of your life.
You've packed your bags, said goodbye to close friends and family,
and traveled, whether by land, sea or air, away from a place that you've always known
as home and arrived on the shores of of the United States of America.
As you're now getting settled into your new environment, you take a look around
and realize a key piece of luggage is missing.
But this isn't a piece of luggage
that the airlines are necessarily going to find for you.
Rather, this is your credit.
The credit profile that you've spent so long building in your home country
unfortunately didn't make the journey with you here stateside.
Now what? Because you understand having good credit
is the difference between qualifying for an auto loan or a home loan to paying
hundreds of thousands of dollars in additional interest.
Rest assured, as a fellow immigrant, the credit journey here
in the United States is certainly not as daunting as it might seem.
In fact, it is quite simple. Hey, guys.
Welcome back to the website.
And for those of you that are new visitors, welcome.
My name is John, and this is the blogger website
that I dedicate to bringing you all of life's personal finance cheat codes.
This post , it's one that's long been overdue.

I've actually received a ton of requests
to do this, and I don't know why it's taken me so long to get around to it
because it's actually something that well, it personally affects me.
So in today's post,
we're going to discuss how immigrants to the United States of America can start
building credit, and I would say building credit rather quickly.
So if that sounds like something you're interested in, please pop a squat,
get out a notebook, because there's going to be some good information here.
And if you wouldn't mind, please tap that thumb icon to help spread the good word.
And we're going to go ahead and dive right in.
First things first.
Who am I to be telling you how immigrants
should be getting credit in the United States?
Well, I myself am actually a first generation immigrant.
I was actually born in China and I moved
to the United States when I was five years old.
Now, granted, a five year old did not have
to worry about credit, though, growing up, I certainly saw it as a topic whenever
my parents were either shopping for a house or a car.

Here's the thing.
My dad, when he first came to the United States,
I would let you say he didn't have the best credit management system.
And so his credit was actually always
pretty bad when we were growing up, whereas my mom was very,
very good at managing her credit, and so her credit was always really good.
And whenever we went, especially I remember these stories vary.
We'd go and we'd be looking to buy a new car, and almost always my dad would lead
the negotiation and, you know, he'd talk them down in price.

But when it comes to actually buying
the car, we'd always use my mom's credit because her credit was much better so
that we could qualify for a lower interest rate.
Of course, growing up,
I eventually did learn the importance of credit and why exactly that is.
But I just want to let you know I've certainly been in your shoes.
Though not directly in an immigrant family, I saw the impacts of what exactly
it meant to have good credit versus poor credit.
So here I'm hoping to help bridge
that gap, but really to get you started the right way on the credit journey.
The second reason that you should trust
that I know what I'm talking about is the fact that I helped my girlfriend,
who's actually an Australian expat, build her credit profile from something
that was completely nonexistent to a score of just above 740 in less than two years.
We had been doing longdistance for about three years prior to her making the move
to America, and when she initially told me the news, I was ecstatic.
But one thing I knew very quickly was
she's not going to have any credit, and she's not going to be able to apply
for any credit cards or any auto or home loans.
So I quickly devised a plan, and again, within less than two years,
I managed to help her build a score of a little bit over 740.
So now that I've shown you my badge, let's go ahead and talk Credit 101 quickly.
Let me give you an overview.

Here in the United States, the credit score is actually a score
that a private company gives you, whether it be FICO or Vantage.
Usually, banks are going to look at you
FICO score, and it is composed of five key components.
35% of your score comes from making payments on time.
30% of your score comes from your credit
usage, meaning how high of a balance you carry relative to your credit limit.
15% comes from your average age
of history, 10% comes from hard increase, and 10% comes from credit mix.
You're going to take a look at all five
of these components, but I think you're going to quickly

realize two of them are much more important than the other three.
The two I'm talking about are going to be
ontime payments and your credit utilization.
65% comes from just making payments on time and in full.
In the United States,
there are three credit agencies TransUnion, Experian, and Equifax.
Those are the three that basically are going to collect all of your credit
information on time payments, trade lines, credit mix.
All of that is filtered into those.
Your credit bureaus, and then all that information gets fed
into, say, the FICO system that then spits out your credit score.
And right now, during COVID I believe you can get one free credit report every week.
But if not, you can get one free credit report from each bureau once per year.
Okay, now let's talk credit building for immigrants and expats.
The first thing you want to do is apply for a Social Security number.
This number is going to be key when you're
going applying for bank accounts or applying for credit cards.
Now, if you don't have a Social Security
number, you can apply for what is known as an Individual Tax Identification Number.
It's very similar to a Social Security number in that it's used for tax reporting
purposes, but you're not eligible to work with an ITIN.

Nevertheless, you can use it sometimes as a substitute to a Social Security number
when you are going about applying for, say, bank accounts or credit cards.
Step two, if you haven't done it already,
go ahead, go to a bank, open a bank account and deposit your cash in there.
Keep your money in the bank,
because it's actually going to be key for some of the ways we build credit
in which they don't actually pull a credit report.
They actually look at what your cash flow is.
The third step here are all the various ways that we can go build credit as
an immigrant or an expat to the United States.
And please keep in mind the principle of making payments on time and in full.
Do not forget that that is so important.
The first thing I want you to look at is,
do you currently have a credit card from some sort of international credit
issuer or bank, namely Citibank, Barclays or an American Express?
Because if that's the case,
you might actually just be able to do kind of a translation or a swap, if you will,
for your home country's version to an American version.
Now, I personally would recommend anyone
who has American Express to take a closer look, and here's why.
With American Express. You have two options.
There is either the global transfer option where you can directly translate your home

version credit card to an American version of an American Express.
I know it sounds weird saying that, so the countries that are going to let you
do a direct transfer are Australia, Canada, France, and the United Kingdom.
If you have an American Express card there, you can try to go ahead and do
a direct transfer to an American flavor or American Express.
The second option to get
an American Express card is actually using a service from Nova Credit.
Now, Nova Credit technically doesn't work
with consumers, but what the company does is they go to your home country and they
pull your credit report, whether it's a hard injury or a soft injury.
Then they take all of that information
and they translate it into something an American Bank would understand.
And that way,
when you apply for an American Express card, they use the report from Nova Credit
to basically judge, are you creditworthy one of the limitations of Nova Credit?
It's not everywhere yet, but it does cover a good number of countries.
So if you're applying specifically for an American Express card,
you can elect to have a Nova Credit report generated if you are coming
from Australia, Canada, India, Mexico, or the United Kingdom.
And if you're coming from Mexico or
the United Kingdom, there will be a hard inquiry on your credit report.
If you're coming from Australia, Canada,
or India, it's actually a soft inquiry on your credit report.
Of course, using Nova credit is not just limited to American Express.
That's one of the examples I brought up, because I just thought American Express is
also generally one of the easier cards when it comes to getting qualified for.
The next option that you're going to want to explore is, can you get added as
an authorized user to someone's credit card account?
So an authorized user is basically just
an additional user added to the main credit card account.
The reason that you want to get added as an authorized user is pretty simple.
An authorized user can actually inherit
some of the good credit from the main user.
So basically, by doing nothing,
you can actually start inheriting good credit and quickly build a credit history.
That's exactly what I did for my girlfriend.
As soon as she moved here, I added her as an authorized user onto one
of my cards, and she was able to inherit some of my really good credit.
Now, I know it might sound weird to go up
to someone and say, hey, can you add me as an authorized user?
Because an authorized user is ultimately not liable for the charge on the card.
What you could say to someone who might be
a little hesitant or they're not too sure, is just to let them know, you know what?

You don't even want the card.

Quite simply, just let them know that they
can add you as an authorized user, but hang on to the credit card.
That's right.
Tell them that you don't even want to touch the credit card,
that they can take the credit card and leave it in a soft drawer,
because all you want is to inherit some of their good credit or any of their
credit so that you have a credit profile to then get cards on your own.
So if you have family member already
in the United States or you have really close friends, consider making the app
and make it very clear that you have no interest in actually using a credit card.
And the only reason you're asking that is so that you can start building a little
credit profile for yourself so that you can go ahead and get your own cards.
Next up, you could go ahead and apply for credit cards on your own.
Now, you're not going to be applying
for the flashy cards with the high sign up bonuses.
Rather, you're applying for the lowest tier of card because they have the lowest.