Jean Danhong Chen Explains how to Establish Credit in a New Country
As if moving to a new country isn’t hard enough, a major obstacle for newcomers is establishing credit once you have arrived in the United States. Whether you are looking to purchase a new car or apply for a mortgage, you will need to start building your credit right away.
As someone who engages exclusively in the area of U.S. Immigration and Naturalization law, Jean Danhong Chen of San Jose, California, knows a thing or two about building great credit. Having advocated for her clients’ interests since 2003, Jean Danhong Chen has a comprehensive knowledge of immigration law and has a few crucial tips for building your credit upon entering the United States.
Understand Credit Scores
First, Jean Danhong Chen explains that your U.S. credit score is also known as your FICO score and can range from 300 to 850; most people have a credit score between 600 and 750. The higher the score, the better it is. As a result, people with higher scores can usually get the best interest rates. In the United States, there are three primary credit bureaus: Equifax, Experian, and Transunion. They will normally match your information using your social security number.
Even if you have outstanding credit scores from another country, they unfortunately do not count in the United States. When you move to the United States, you have to start from scratch, but that doesn’t mean you can’t start rebuilding it. Building credit can make it easier to apply for a mortgage, get a car loan, rent an apartment, or get a rewards credit card.
Secured Credit Cards
For immigrants, the easiest way to start building credit is by going into a bank and asking if they offer a secured credit card. A secured credit card is a special type of credit card that is secured by collateral. Jean Danhong Chen explains that the bank will ask you to put a certain amount of money in a bank account and leave it there and they will allow you to charge the secured credit card up to the amount you are holding in the account. Put simply, if you deposit $800, you can then borrow up to $800. This is a great way for new residents to be able to build credit.
Additionally, Jean Danhong Chen explains that it is important to check if the bank you used back home has a location in the United States, as they may issue U.S. credit cards for clients moving to the United States.
Become a User or Find a Co-signor
If you relocated for your spouse, you may be able to utilize their good credit by becoming an authorized user on their credit card. This means that you will get your own credit card, which is directly linked to their account. Of course, the best person to ask is someone who has demonstrated excellent financial responsibility. Jean Danhong Chen explains that major credit card companies like Bank of America, Citi, Capital One, and Chase report authorized user transactions to credit bureaus, which can help you begin to build your credit.
On the other hand, if you have been turned down for a credit card, consider including another person on your next application who has solid income and excellent credit scores to be your co-signor. It is important to note that if you do not pay your bills on time, this will also affect their overall credit score and vice versa, so be sure to only use this option with someone you trust.
Final Thoughts from Jean Danhong Chen
Once you have a credit card, consider setting up automatic payments so that you do not miss a single payment. Making sure that your credit cards, loans, and utilities are set up to be paid automatically ensures that your credit rating stays high and that there is no chance of missing a deadline.
Establishing great credit as a recent immigrant can be difficult. If you want to ensure that you are successful in your transition, consider working with an immigration lawyer. Jean Danhong Chen has helped over 10,000 visa and green card case approvals across all 50 U.S. states since 2003 and is confident in her ability to make your transition as smooth as possible.