Building credit as a natural-born American citizen is difficult enough, but for immigrants, it can seem nearly impossible just to get started. Approximately 43.3 million foreign-born people live in the United States, and most of them essentially have to start over from nothing when they arrive in the country. Fortunately, there are many small steps you can take to build your credit as a new immigrant. Here are just a few smart credit-building strategies for new immigrants.
Get A Social Security Card
As the only real unique identifier you’ll have in the eyes of the law, an SSN is necessary to start tracking your credit history. While it’s not technically required to start building credit, it makes the process easier to track and much more efficient.
Apply For Your First Credit Card in Person
Getting approved for a credit card isn’t easy for those who have never had one before, but visiting your local bank or credit union in person to explain your unique situation is always a good idea. Experts also say that bringing evidence of any positive credit history you may have had in your home country can help to gain approval.
If you’re still struggling to get approved, don’t hesitate to request a secured credit card. Though secured credit cards do require an initial deposit, financial institutions see them as less of a risk, which means you’re more likely to get approved.
When it comes to building credit, most experts agree that smaller is better in terms of both purchases and credit limits. Starting small helps to pave the way for any larger loans you may want to pursue in the future, like a mortgage. Back in 2004, 69% of Americans owned a house. However, that number is down to 63.4% today, simply because it can be so difficult, even for those who were born and raised in the States, to get mortgage approval. But more importantly, keeping your purchases small helps to avoid using all of the credit you have available (referred to as your credit utilization ratio). And of course, always be prompt with your payments. An online bank account is a great way to manage dates and deadlines.
“It’s imperative that, each month, you pay your bill in full and on time. Once you get your credit card, create reminders from within your online account to help you stay on top of your bill’s due dates,” writes Susan Shain on SelfLender.
If you’re in need of more financial options, don’t hesitate to reach out to a professional who can help you make and carry out a plan based on your financial needs. There are 1,315,561 lawyers in the United States, and an immigration lawyer can serve as just as helpful of a resource as a financial planner for new immigrants looking to build their credit scores and take one calculated step at a time.