How to Build Credit if You’re a New American Citizen

How to Build Credit if You’re a New American Citizen
David Andrew
By: David Andrew
Posted: September 10, 2013's popular "How-To" series is for those who seek to improve, rebuild or better understand their subprime credit rating.

Moving to a new country is an exciting process, but it can also be a complicated one.

One of the first things you need to start working on as a new American citizen is your credit score. Your credit information from your old country will not transfer over.

There are some challenges to building credit as a new citizen. With a little planning, you can quickly get to a decent score.

1. Apply for a Social Security number.

To take out a loan or a credit card in the U.S., you need a Social Security number. This is how credit agencies track your accounts to determine your credit score.

If you are already a citizen, you should have a Social Security number, but if you are a new resident on a visa, you might not have one yet.

To get a Social Security number, you need to apply for one with the Social Security Administration. You will need to be eligible to work in the U.S. to qualify for a Social Security number.

2. Contact your old credit card companies.

Qualifying for a credit card as a new American citizen can be tricky because you do not have any credit history.

They may be willing to give you a card in the U.S. despite your lack of American credit history because they can see you had decent credit habits in your old country.

This is a possibility with the major international credit card companies like Visa and American Express. There is no guarantee this will work, but it is worth asking.

“If you had credit cards in your old country,

credit card companies may help you.”

3. Sign up for a joint credit card with a co-signer.

While you might not have any credit history in the U.S., maybe your spouse, family members or close friends do. If so, contact them and see if they would be willing to set up a joint account with you.

A joint credit account builds up your credit score just as effectively as a card only in your name. Since the other person is co-signing, the lenders will make a decision based on the other person’s credit history.

If you do take out a joint account, be very careful about making all your payments on time. Missing payments will hurt your co-signer’s credit score along with your own.

4. Set up a secured credit card.

Another way to build credit as a new American citizen is with a secured credit card. To use one of these cards, you need to make a deposit with the issuer equal to your card’s credit limit.

Since the issuer has this secured deposit, they will be willing to give you a card even though you have no credit history.

Secured credit cards build up your credit just like a normal credit card, so this is a good way to get started.

5. Maintain good credit habits and track your score.

It does not take long to build up a solid credit score in the U.S. If you make all your minimum payments on time each month, you’ll quickly build up credit rating.

After a few months of using your old account, call the rating bureaus and ask for a copy of your credit report.

This will show how much progress you have made toward building up your credit. It will also give you an idea whether you can upgrade to a better card or if you still need to wait a few more months.

While sorting out credit in the U.S. can seem daunting, it is a pretty straightforward process, especially once you get started.

Stay responsible with your payments and soon you will have a great score. Welcome to the U.S.!