How does an immigrant get credit in the U.S.?

Step-by-step instructions

Many Americans live with loans, which is considered quite normal ” According to After all, loans are often needed for large, expensive purchases, such as a car or a house. But to qualify for a loan, a bank must get something of value in return as a guarantee of repayment. It carefully examines a customer’s financial situation, looking at his or her current income, employment history, credit rating, monthly payment, and credit history. But what about those who are new to the country? Read today in USA.

ONE: How immigrants can build a credit history in the U.S. Step-by-step instructions from the ground up.

A good credit score means creating a positive payment history and report. This means that the customer does not fall behind on payments and repays the loan on time. Credit bureaus create special documents on each person that list their bills, debts, and when they are due, and then convert this information into a credit rating. It can range from 300 to 850, with 700 being considered good. If there is no credit rating, the borrower will have difficulty obtaining a loan due to the lack of history. In other words, the bank knows nothing about him and is unlikely to take the risk.

How do you fix this?
It can take years to build a good credit score in the U.S., but there are times when immigrants need money now. In this case, you can try transferring your credit history from your previous country of residence through Nova Credit.
This system is connected to the world’s leading consumer credit bureaus and provides credit history to U.S. creditors. It is valid for countries such as Mexico, the UK, Australia, India and others. If for some reason that’s not an option, then building a good credit score can be done from scratch.

5 steps to build a good credit history

First, you need to apply for a Social Security Number (SSN). This is a 9-digit code that is assigned to Americans to track benefits and income. It is issued by the Social Security Administration. You need your SSN for employment, benefits and access to some other government services. Banks may ask for a Social Security Number before giving a credit card to make sure you are who you say you are. In most cases, the SSN is available only to immigrants who are authorized to work in the United States.
If you can’t get one, you can request an Individual Taxpayer Identification Number (ITIN), which will serve as a temporary substitute for the SSN.

The next step is to open a secured credit card.

Without credit history it is difficult and almost impossible to get a standard credit card, but immigrants are eligible for a card from CreditStacks. It is designed for professionals who have recently moved to the States. To establish yourself in the eyes of the bank, you can offer it a deposit. With a credit card, a deposit is made and the issuing company issues a card with a spending limit equal to its amount.

This means that the immigrant will use his own money, at the same time creating a good credit history. If acted intelligently, it will be possible to create a positive credit report and rating. A loan to build credit will help strengthen it. This means that the bank will transfer a small amount to a secured savings account on behalf of the client.

This loan will remain in the account. It has to be repaid monthly. When the money in the account is paid in full, it becomes the property of the immigrant, and he can use it as he wants. That way both personal savings and credit history will grow.

It is important to remember that such a loan has an interest rate, but it will help develop good savings habits. Loans are used between $300 and $1,000. The monthly payment will be small and easy to qualify for.

The next step is to use the accounts responsibly, to show the bank that it has a reliable borrower in front of it. To do this, you need to make timely payments, which include rent and utility bills. If an immigrant defaults on payments or has outstanding debt, the credit agency will be notified, affecting your credit score. Most companies have an app or automatic payment setup so that payments go out on time, even if the person forgets about them. Lending experts advise using about 30% of the credit limit on the card.

The balance should be paid in full each month. If you have to use the card more often, you can pay with it several times a month. For example, if your credit limit is $300, your total spending should not exceed $100. If you must continue to use your card until your next payment cycle, you should add $100 to your card before you can withdraw again. The age of the account is also important. Accounts should be kept open as long as possible. Sooner or later, the borrower will have to open a new one to build up the loan amount. But each new account reduces the average age of the account. A long credit history has a positive effect on your credit score, so it is not advisable to open too many accounts at once. It is important to monitor your own credit report and rating. Many websites and card companies offer to do this for free and as many times as you like. The credit bureaus keep a credit report for the customer and he can get a copy of it for free once a year by requesting it. With the credit report, the immigrant can trace any discrepancies that negatively affect their credit rating. What else do I need to get a loan? photo: Pikabu Having created a positive credit history and earned a good rating, you can try to apply for a loan. In addition to these two points, the bank takes into account several more. First, it looks at the immigrant’s current income and its source. It is important to lenders that the monthly loan payments equal 43% of the client’s income. Current debts and credit obligations are also taken into account. These figures directly affect the creditworthiness of the borrower. Employment history is also an important criterion for the bank. It values stability and consistency. If the immigrant runs from one job to another, he will have to try to find evidence of his solvency. But working for the same company for several years is also not a guarantee of success. It is important for lenders to understand that their client does not change fields like a glove. It’s better to build a career in a particular industry, even if you have to change jobs. It is important for the bank, as well as the borrower, to know the monthly payment amount (EMI). This is a calculation that specifies the minimum payment per month on a loan that is sufficient to pay it off on time, including interest. In addition, the bank will consider the amount requested by the client. It can refuse too much credit even with a good credit rating and a stable, high salary. The borrower’s age and length of residence in the United States are also taken into consideration.

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