OK – you just arrived in the USA and maybe you are already learning that your “credit rating” is very important here in the USA.
Almost every adult legally residing in the USA has a Social Security Number (SSN), or tax ID. Your SSN is issued to you one time and never changes. Employers report your earnings and taxes against that number, which is a legitimate use of the number and credit history companies track your history against the number also. However, you will be asked for the number as a personal identifier in all sorts of situations where it really isn’t a legitimate use of the number – but Americans seem to hand it out freely. You will also need to provide the number to open a bank account (normally), for a driving license (in most states) and so on.
Getting the SSN
So – the SSN is a BIG DEAL. If you are a DV lottery winner you probably checked (ticked) the box to have USCIS request a number on your behalf. Unfortunately that doesn’t always work well. So – I would suggest a visit to the SSA office – you can find a location here. The SSA staff will sometimes say it takes a few days after you enter the US to be searchable in their system. They will need to search you to confirm your immigration status. However, you will certainly want to do this fairly soon because you will very soon realize that not having an SSN is a big nuisance.
OK – got the SSN – what next?
OK – so now you have your SSN. You won’t appear on credit agency files yet, so you need to do a few things to get a credit file as soon as possible. A “credit history” is maintained by a small number of bureaus (Equifax, Experian, Transunion) that gather and sell financial information about you. Various companies that lend money will report information information about how you pay your bills to these three agencies. Then when any other lender is deciding whether to give you credit, they can “pull” your credit file and see that you pay your bills on time and so on. This doesn’t just affect credit, it can affect your ability or costs to rent a home, get car insurance, get a mobile phone contract and so on. Really – this is part of your daily life – so it is worth taking seriously.
In the beginning you will have a “thin file” meaning they recognize you (your SSN) but you have little or no financial information. The trick is to do things that start to build your file and make sure you build a good credit score as soon as possible.
Tips to build good credit history
The following things are good to do to get started and to build a good credit history.
- Open a bank account (do that for you and your spouse). This won’t get reported to your credit report, but you will need an account anyway and if you sit down with an account representative they are usually very helpful and keen to help you (hoping you will stay with them). I would recommend sticking with a large bank – ideally one that does “secured credit cards”).
- Ask the bank to approve you for a debit card as a minimum and ask if they have any other offers to help you start building your credit history.
- If you have a close relative (already in the US) who already has a good credit history, see if they will get some credit in your name. They can open a credit card with you as a named user, and that will get reported against your credit report.
- If you previously had an American EXpress card in your home country, you hopefully asked them to do a “global transfer”. THis can start you off with an Amex card in the States much faster than normal. If you did that, make sure you contact them and report your SSN to them as soon as possible so they start reporting to the credit agencies.
- Open a secured credit card account. These credit cards are useful to build your credit history, and useful because there are many things you cannot do without a credit card. The basic concept is that you deposit an amount of money with a bank/lender and they give you a credit card with that amount as a credit limit. So – deposit $500, and you get a credit limit of $500. Deposit $2000 and get a $2000 limit. Yes – you are borrowing against your own money (and you don’t get your deposit back for at least 6 months, maybe longer). This is VERY worthwhile and probably one of the best things you can do to start building credit.
- For any credit cards you have, try to not use more than 25% of the credit limit at any time. If necessary, pay money off your credit card account every few days as you use the card just to make sure you keep the credit amount down. You want to have your monthly bill show more than $0 but less than 25% of the max limit. After a couple of months that activity will appear on your credit report and you will be building your credit file.
- Approach a Credit Union. These are similar to banks, but are typically able to offer better deals for loans. By opening an account with them you begin to build a history with them and that may help when you want car loans etc.
- Do not apply for lots of credit cards or loans. Each time someone does a “hard” pull of your credit file the agencies make a note. If you are running around applying for credit every few days your credit score will go down because it looks like you are desperate to get credit. So – for the first 30 to 60 days don’t apply for anything other than the secured credit card. Applying when you know you’ll be declined is a bad idea!
- After about 2 to 4 weeks of having your SSN open an account (this is free) with CreditKarma. This site will let you see your credit history as you build it – and you begin to understand how lenders see you. There are credit offers on the site and you will find you will be able to get some decent offers through the site. There are also good tools to predict what impact you will experience from doing things like applying for a new credit card.
- You can also get “free” credit reports from the big three credit agencies – but each one will want you to take a “trial” of their credit monitoring service. So – in general – don’t do it – because “free” invariably ends up costing you money and you can get the same info from CreditKarma.
- After 2 or 3 months you might be able to get a car loan. If you do get a loan that early, the rates you are offered won’t be that good. You need “good credit” to get “cheap credit”. So – if you do get a car loan, keep it “modest” – the Ferrari can wait for now. Ideally put down a good deposit and negotiate a better interest rate by increasing your deposit. I actually took a small loan on a motorbike where I said to the dealer I would only buy the motorbike if they would arrange a small loan. I had enough money to buy the bike with cash, but I wanted the loan to show on my credit score – so I borrowed about $5k and immediately paid off about $3k of that loan. That means I will only pay interest on $2k, but my credit score shows that I have only $2k left (less now) on a $5k loan – so it shows that I can handle repayments. Car and motorbike loans are a different category of credit so it helps to have a combination of types of loans.
- After 6 to 12 months you should be able to get your secured credit card deposit back (so the card converts to an unsecured credit card), you will also be getting credit offers and you can increase your credit limit – again – a high limit with low utilization is best.
- Also after about 9 to 12 months you may be able to qualify for a mortgage to buy a home (if you want to do so – and I highly recommend you do). Being a “homeowner” will make you very creditworthy and there are knock on impacts in many aspects of your life – plus it is better than paying landlords! Again, having a deposit will be a big factor in securing a good mortagge rate – so balance when to apply for the mortgage so you benefit from fair market rates.
- Check your credit report each year. You are entitled to a free copy of your credit report from each agency once every 12 months and you can do that through this site which provides the report from all three companies. Also – if you are declined credit because of an adverse report by one of these companies, then that particular company will provide a free credit report within 60 days of the adverse report. That is worth doing to make sure nothing “inaccurate and bad” is reported on your file. Mistakes can happen and also someone could try and steal your identity and obtain credit in your name (which is a good reason to protect personal information such as your SSN).
- Each agency has their own way of scoring people and so the actual scores can vary. One of the most important credit scores is the FICO score – that is the most commonly used one. It is a score based on information from all three agencies – and because of this it may take several months before you will have that score. A FICO score of 720+ is considered good – good enough to get standard interest rates if you need credit. Some credit cards are providing access to your FICO score which is a very useful way to keep an eye on your situation. You can also pay to see your scores at www.myfico.com
- If you do make a mistake by paying a bill late or notice something reported on your credit report – then you should always try and correct the issue and dispute it (if unjustified). Making mistakes is human, ignoring them and pretending they will not be noticed will only make things worse.
Okay – hope that helps. Again – I’m happy to get feedback or questions on the form below or feel free to email me to ask if anything is unclear!
March 21, 2015 at 08:07
You mention transferring an American Express Card over to the USA. I have one that I got through my Bank In Australia (ANZ). Would I be able to transfer this or is it not an Actual American Express Card that has been issued by american express themselves?
March 21, 2015 at 13:36
I believe it would be direct with Amex – but check with them….
October 13, 2015 at 01:50
Not sure if you can help me with this question, but it’s worth giving it a try:
For the two years I lived in the US as an international student getting my masters degree, I had a bank account, which I was able to open with my passport and a tax id (ITIN) number since I wasn’t eligible for a SSN. I don’t suppose that debit/credit card will remain part of my credit history, right? Any idea?
Thanks in advance!
October 13, 2015 at 04:44
A debit card does not hit your credit history. A credit card might – particularly if the account can be re-activated. If so you give them your SSN and they will connect the dots.
October 13, 2015 at 18:03
awesome info!! thank you so much Mr. Britsimon. I just have to ask you about something in my mind. What if my family gave me the needed amount of money to buy a small house with less than 70 k usd. will I have to pay taxes on that as a new immegrant?! thank you again.
October 13, 2015 at 23:05
You won’t pay taxes on the 70k.
December 21, 2015 at 20:47
I got my immigrant visa through the DV 2016 and I will move to USA in february 2016. I have had a secure credit card with a US Bank for about seven years, but considering that during those years I didn’t have a SSN, that means that I do not have a “Credit History”?… I will go to the bank as soon as I get my SSN to associate it with my bank account and secure credit card, so my question is: From that moment will I begin to built my file? or the previous years will count? I really appreciate your advice.
December 21, 2015 at 21:33
I can’t be sure how they will show that on the credit report.
February 15, 2016 at 00:58
Hi Simon – thanks for the great article – really useful. One question… my new American wife has a bad credit rating. Should I just open my own bank account and leave it at that, or is it ok for us to have a joint account? That is going to be useful for my green card process, but i am concerned that i will inherit some of her bad credit score if we go for a joint account.
February 15, 2016 at 01:25
You are associated with her regardless – so her bad credit will affect you regardless. Take credit cards etc in your own name, but bank accounts don’t get reported on the credit report.
March 3, 2016 at 23:22
Just wondering if my credit rating in Australia can be used in the USA?
March 4, 2016 at 02:54
Yes and no (mostly no).
The credit rating systems between the two countries are totally independent. USA credit companies will not accept any encouragement to connect the two. Also, it doesn’t matter how much cash you have, credit history is based on credit.
Now, one thing you might be able to do is an Amex “global transfer” (if you already have an Amex in Australia). THat is a fast way to get a credit card in the USA, and because you get a credit card quickly, your credit rating will get off to a faster start.
June 11, 2016 at 04:02
Hi Simon, turns out I do have a question after all ? My husband and I have been doing some research about living in New York, but majority, if not all of the apartments we have looked at, require good credit history. It seems this is a catch 22, because you build credit history by proving you can pay your rent on time, bills, credit cards etc, but you can’t rent without a decent credit history/score… Do you have a suggestion around how to get around this somewhat critical issue…? (I will apply for an Amex card asap, but that seemed to be the only thing I can do from Australia before finding out if we are successful in obtaining a green card and then relocating). Thanks, Nicole B.
June 11, 2016 at 05:13
@NicoleB- Britsimon discourages people answering DV related technical questions in case it’s misleading. However since your question is on credit, I will risk suggestions which had worked for me in the past in the states, and one longer term common strategy to build credit that is available for most people. On renting without credit history, some landlords/apartments will accept a larger deposit (say 3 months) or a larger advanced rent payment you negotiate and if you can afford it, especially if you show them a stable and healthy bank statement across a period of time and a confirmed employment situation. Used that before and it worked out well. If not, you can try to get a guarantor with a strong credit history (your sponsor?) and some may accept that, although this is normally more for young adults in college who rely on their parents’ or other working adults’ credit scores to rent homes. On a longer term, many banks have a “secured” credit card arrangement for people with no credit history where you can put a deposit down for a “credit card” which can accumulate credit history, through use and reliable payments, but you are essentially only spending the money you have deposited in advance (functions like a debit card). After building up your credit history that way and through other means, you can then switch to a regular card. Hope it helps.
June 11, 2016 at 05:26
see britsimon’s note on secured credit – sorry missed that – it really is the best thing to do as a starting point.
June 11, 2016 at 14:35
All good points!
If we are talking about NYC – that is a place that is notoriously difficult to find a rental home. The demand is such that rents are high and good places rent out in hours.
A better bet might be to look for corporate housing for the first 2 to 3 months. It’s a fully furnished option, and it is an expensive option, but the credit check requirements are less/none because you are expected to pay as you go and have no rights (unlike a tenant).
June 15, 2016 at 12:11
Thank you both! I saw on Crawfin’ USA that Citibank also allow Australian credit history for certain credit cards to be used to secure a card in the US, so I’m in the process of applying for one since I already have a debit card through them and would prefer Citibank to American Express. A rep in Aus is checking with their overseas team to see how that process works, so hopefully that’ll be a start ??
I haven’t heard of corporate housing before, so I’ll look into that. I’m not too fussed about where we’d live to be honest, but we got married in New York in 2014, and fell in love with the city, so it’s more of a romantic notion than a practical one. I’ll keep looking though. My profession (child protective services) will mean a very significant pay cut in the US, so I’ll need to remain practical and open minded about location if I’m to survive ? Thanks for the advice.
June 15, 2016 at 13:40
I see. You need to think about where you want to live. NY is great, but very cold in the winter. It’s also very expensive (although wages are set to allow for that). Have a think about what sort of place you see yourself living in….
June 15, 2016 at 14:20
Well my husband is a cop in Australia, but he doesn’t want to do that in the US because of the prevalence of guns and the much higher chance that he’ll get shot. So he’s obviously far less excited about moving to the US than me (but that’s marriage right, compromise ?) I’ve been looking at states that allow permanent residents to become cops (majority require citizenship) in case he changes his mind, or there isn’t anything else that he can do there… (He has a psych degree but just the three years which makes it fairly unuseable). So far it’s down to Illinois and Oregon really, possibly Maine but I might need to contact them to make sure. I like the idea of Oregon, I like beer and hipsters, but my husband supports the 49ers, so he’d love to live in San Fran, but the rent there and iffy job prospects preclude that from ever happening! It’s tough really… Only being able to guess at jobs that we might be able to get and work out if we can afford to live on way less money (even with the lower cost of living). But I guess that’s the point, moving to another continent isn’t likely to be easy, if we are successful in obtaining a green card, I just hope I can convince my husband it’ll all work out ?
June 15, 2016 at 15:18
Despite what you see in the news, most cops never have to fire their weapon – and when the cops arrive, there are a hundred of them! Don’t forget to check out requirements for being a Sheriff also – might be different requirements. LEO/Firemen get good salaries, and fantastic benefits, so it is well worth looking into!
Also, the standard of living here is very good, so I think you are over worried whether you will get by here – but as I say, think where you want to live. What weather you want, what leisure activities you want, what political leanings you want and so on. Maybe plan a bit of a road trip in your first few weeks to see a few places before you decide.
August 15, 2016 at 16:12
Very useful article, Simon – thanks. As an immigrant I had a lot of issues at the beginning while trying to establish a credit history. At this time I am using Wallethub (https://wallethub.com/free-credit-score/) because they are ad-free and the information is updated daily, unlike existing services whose data can be up to a month old. I am also getting 24/7 credit monitoring and customized savings alerts from them.
October 7, 2016 at 07:52
Hi Simon, will having a bank loan of €5000 in my country have a bad effect on the interview or on the credit rating once i get to the US?
October 7, 2016 at 13:46
January 12, 2017 at 18:20
I’m wondering, having a visa credit card in my country, will help in my future credit score in States?
January 12, 2017 at 19:12
Normally no (the exception being a few credit cards that open a USA credit card account related to the foreign credit card account).
April 6, 2017 at 03:26
I am so proud of you and the time you offer to help thousands of us out there who are so ignorant of lots of things which you provide valuable information on for free!
Of all who have discovered this site and blogs, I believe I have profited the most and I will never be able to pay you for this.
Sharing what I have benefited from your blogs is part of my own way of saying thank you and to encourage others.
I have a lot to write but let be begin with building my credit.
When I came to US, I had relatives who where unapproachable to discuss anything that has to do with their finance so I had to start from crash. I tried to open and account with a credit union but I was rejected for having no credit so I went to BOFA and asked for a secured credit card ($500) as you mention. So with this bank I had a checking, saving and a credit account. I made sure at any given point in time I will not use more than 25% of my credit line and with online banking I made sure I keep it as low as possible but not zero and I made sure pay back everything before the due date and continue in that routine. Just after 5 months my FICO score went up to 700+.
Thank you Sir once again and I will be applying all that you have said concerning credit score.
God bless you!!
May 14, 2017 at 10:35
Hi Simon, quick question. My husband and i activated our residency visas 18 April, and I heard from my friend who’s address I used that my social security card has arrived, but only mine. It took around a week after I entered the states. I’m the primary. Should I keep waiting for my husband’s SSN to arrive or contact someone? It’s a bit tricky since I’m back in Australia. I can stay up a bit late and call the US once they open in the morning I guess? Thanks, Nicole.
May 14, 2017 at 15:46
June 2, 2017 at 16:33
Another fantastic article of yours!
Please help me on this:
I am an Amex member in Italy since 2001 and all has always gone fine and now I own he gold card. Therefore I will act the global transfer thing hoping it will start building credit.
One thing is not clear to me, though – You mention opening a bank account (of course) and go for a secured credit card account (I presume debit card is part of the account and can be included in the package).
The question is: should I go for both, Amex and secure credit card or you suggest a different sequence?
Thanks in advance as usual Simon,
June 2, 2017 at 17:16
The Amex card and credit cards are slightly different types of credit accounts. It is worth having both. In fact, to have the best credit scores possible you need to have several types of credit accounts AND more than one credit card. So – the ideal credit profile will have two or three credit cards (with low utilization), possibly an Amex card, a loan (such as a car loan), and a mortgage.
A debit card is not a credit card and therefore doesn’t get reported to the credit agencies (so doesn’t build credit history). Also, liquid assets (like cash in the bank) don’t help build a credit score.
June 2, 2017 at 19:00
Couldn’t be clearer. Thanks!
July 14, 2017 at 02:09
Brit do you have a list of recommended banks to open a secured credit card?
July 14, 2017 at 06:24
No. Any will do.
July 28, 2017 at 10:01
First of all thank you very much for sharing these precious information.
I’m currently looking for jobs in US from UK and I think being quite close to get an offer and discuss the starting date.
I have to consider the necessary time to get a SSN, a bank account and a flat.
– From your experience how many days or weeks after my entry do I need to get all of that, and be able to work?
As a DV winner I ticked the box to automatically ask for a SSN, and from what you said it generally not works.
And even if it works 3 weeks are really long to get your card.
So I will probably go the next day I enter in the US to the local SS center to ask for a SSN.
– Can they give you the SSN directly at the center and send you the card at your temporary residence (like a hotel)?
July 28, 2017 at 14:00
You can’t arrive one day and get the SSN the next day. It takes a couple of weeks.
July 22, 2018 at 23:22
Have you ever heard of capital one? Do you recomend it?
July 22, 2018 at 23:32
Capital One is a well known credit company. They, like many companies, offer different cards – with different terms. Be careful to compare terms.
June 21, 2019 at 05:30
hi Brit, just wondering if having any unpaid bills (credit cards, phone bills) during my stay in States five years back as an International student will affect my DV lottery process. I also have a SSN
June 21, 2019 at 13:27
July 4, 2019 at 10:34
Happy 4th of July.
I will be coming back to the US shortly after my initial visit, and I will be looking to open a bank account ASAP as I already have my SSN. When I called multiple branches in the NYC area to ask which documents they require, I can provide everything except proof of address. The only document I have is my SSN letter, which has my US address, however they will not accept it. I simply don’t know what else I can show them as I won’t have a utility bill in my name or a state ID as I will be moving to Washington state in 1-2 months (but need to open a bank account now). 2 part question:
1. Do you have any experience at all with Wells Fargo, Chase or Bank of America in this regard? These are my preferred banks as they are the only big banks operating in Seattle. I am not comfortable opening an online bank account as a new immigrant (I tried).
2. I read somewhere that New Jersey has different requirements than New York when opening a bank account. Do you know if this true? Couldn’t find any info online that gives a state by state overview.
Any other thoughts?
July 4, 2019 at 15:17
They are normally quite accommodating if you go in and sit with them. If one bank doesn’t help, go to another.
August 1, 2020 at 15:53
2021 selectee here who is about to prepare the ds 260.
Is it possible to check my credit while I haven’t live in the US anymore (for >5 years)?
I tried accessing credit karma and annualcreditreport, both block me because I am outside of the US. Would using a vpn be not allowed? Is there a completely legal way to do this? If so, what address would I put down?
I used to live there on H1b and had good credit. I cancelled all my credit cards (except for a smaller one that I am trying to find now).
Many thanks and have a nice weekend!
August 1, 2020 at 16:04
I don’t know. But a credit check is not required for CP processing.
October 16, 2020 at 19:19
Would you recommend getting social security numbers for your children who are under 3 years if you move to the USA?
October 16, 2020 at 22:10