Building credit
 

Hi what is the best way to build credit when arriving in the USA?

Re: Building credit
 

So far i've been here 4 months and with 1 secured credit card I have built a "Good" nearly "Very good" credit rating with Trans Union and Equifax. I use Discover.

I have a measly $500 limit, but what I do is pay off the balance every couple days. The reason for this is that credit card utilization for each statement will affect your credit rating.

This month I spent $550 on my credit card, but the balance is now $0 ready for my statement on the 23rd. When reported to the bureau it will look like i'm fantastic with managing credit and I still get all of the cashback.

As soon as I get my imminently awaited EAD and can start my job I will go ahead and get them to change it to an unsecured card.

An auto loan may also help. I considered purchasing a Nissan and they said that as long as I earned $75k+ a year then they wouldn't need to credit check and would immediately offer best rate.

Re: Building credit
 

Check out our Wiki Guide on this topic.

Rene

Re: Building credit
 

Re: Building credit
 

If you need a car, and one of you has a job in the US ready, waiting for you, a car through International Autosource will get you onto the credit reporting system immediately with a regular installment loan.

Even if you could pay cash for a car, borrow a little through IA (IA is an agent for the auto manufacturers credit units (my Mustang bought through IA was financed through Ford Motor Credit), and pay it off over 12 months and it will kick-start your credit, and means you don't have to worry about buying a car when you have so many other things to do after you arrive. :)

Re: Building credit
 

My background: Crossed border K-1 ... Married Oct 2013. Green Card delayed til July 2014, Social that September. Searching for job Sept/Oct got Job November 2014.

Turned down for apartment October 2014 ... No credit and actually my report stated fellony crimes in Kentucky 1999. Thanks America, thanks! Appeal to Texas while onboarding at new job and looking for place to live.

No ability to drive so can't do car credit. Clearing the false fellony also helped a lot.

Journey:
- Secured Credit $300
- After a year JC PENNEY denined
- Waited a bit, kept the $300 the balance under $150
- Approved Kroger Rewards, $5,000 limit
- Kept that balance below $2,500
- Always made payments on time (auto pay)
- Kept using the credit and churning through payments, mainly did that by loading Student Loan payments on Credit (Brexit helped exchange rate).

Score went through the roof based on, never missing payments, using the credit, keeping balances low, number of total lines of credit low and waiting for average age to tick over a year before making new applications.

Re: Building credit
 

Word of warning, I heard it's better to have some balance than no balance for the purposes of building credit.

i.e. the ideal credit card balance when they pull your statement is $1.

I don't know if that's true though. But it's what I heard.

Also, how will you get them to change to an unsecured card. I'm in the exact same boat as you, I've got a secured Discover with a $500 credit limit which I've had for 4 months. But I'm already working. I didn't think they'd graduate you to an unsecured card until you hit 8 months of credit history.

Re: Building credit
 

Yes keep your balance in the 20 to 30% utilization area and don't go down to zero balance. Try not to go above 50% too. I aim to be in the 15 to 30% zone in case any emergency comes up.

Like I had to fly home for a funeral with little time to plan and well it was in June and that was expensive.

Re: Building credit
 

I don't see much truth to that. My statement balances were always $0 and I graduated automatically after about 6-8 months. Since then they automatically bumped my limit again ($500-$1000-$1500).

Re: Building credit
 

I'd agree with Tom. I always ensured my balance was $0.

I've since graduated from my secured card with a $300 limit. To an unsecured card with a $500 limit and it just recently got upgraded to $1000. The entire time I've ensured the balance was paid in full down to $0 and not used more than 30% of my credit allowance.

Re: Building credit
 

The average age of all combined lines of credit also factors in. Don't open too many lines but if you have to try to get them all within that year so the age at the same time ... Keeping the average age up.

That's what I'm struggling against, if I can get my average credit age up that's the only thing left I can do.

Re: Building credit
 

There's nothing really that you can do about that, except wait patiently.

Re: Building credit
 

What credit checking bureau is recommended? I'm staying away from Equifax after the gigantic breach.

HSBC gave me a credit card based on my salary, so I had a $10,000 limit off the bat with 0% for a year. We ended up hitting it pretty hard due to the enormous cost of setting up an apartment from nothing, but I'm trying to pay it down as rapidly as possible now that we've almost got everything we need.

It would be good to check after Christmas once I've been here for a full quarter.

Re: Building credit
 

Your details are probably on the black market for sale regardless of what credit bureau you use. :lol:

I use CreditKarma on my iOS device and I also use Experian from time to time.

Re: Building credit
 

Credit Karma, Credit Sesame and CreditWise/Capital One are all good and free.

Even if you don't use Equifax for credit checking, they will still hold information on you.

Re: Building credit
 

Also use credit karma and Discover's FICO score.

Re: Building credit
 

Related to this topic, I moved to the US mid-October and have just gotten CreditKarma setup, my score right now is 735 which seems pretty good all things considered (I have 2 credit cards active.)

Re: Building credit
 

I got an Amex card about 6 months before I moved. They have s global transfer scheme and I got $8k as soon as I arrived in Mid Nov. Nearly maxed the card setting up but dont know if best to pay it all or leave sum or let the statement come in as nearly maxed and pay in full.

I also got a BMW on lease as BMW have their own finance and do global credit checking.

N

Re: Building credit
 

Tom I just got a Nissan on lease with an $80000 pension they did credit check but all was OK but they did not check on income just took my word

Re: Building credit
 

my UK credit rating is good but I understand you need to “start again” in the US. How difficult will it be to obtain credit? How long would I need to build credit to get a car loan? Mobile/cell contract? rent an apartment? Besides prepaid/ discovery type credit cards can anyone suggest other ways to build credit?

Re: Building credit
 

I got an Amex card in the UK and used it for 4 months. They have me a US Amex under global transfer with a decent credit limit in one phone call.

I went in to TMobile when I arrived and got the same plan as anyone would get. $145 a month for 3 phones with unlimited calls and text and 50gb of shared data and a years Netflix subscription. All I had to do was give them a $145 deposit which they credit back to my account after 13 months.

Also managed to lease an X5 as BMW have their own finance and do a UK credit check under their exec program.

Re: Building credit
 

Thanks very much. Will try for an AMEX beforehand. It’s good to know getting a phone contract won’t be difficult! X5 nice car! Thanks, Daniel.

Re: Building credit
 

You could read the thread, or the super helpful Wiki entry, above, that covers most of those questions as a good starting point...

Fatbrit's Guide to Credit and Finance : British Expat Wiki

Re: Building credit
 

Though budget anything from $50-600 as a deposit for all utilities.

Re: Building credit
 

I use credit karma as a guide only. Scores were 20-30 points higher when my credit was pulled by our mortgage provider vs the info on credit karma. Not sure why... we got a better rate in any case!

Re: Building credit
 

Agreed, Credit Karma uses a different scoring model, and I find that banks/lenders consistently report that my FICO credit score is at least 20-30 points higher than CK reports.

Re: Building credit
 

Thanks Bob. Have read the thread and have learnt some good stuff - thank you. Can you please clarify though as you made my heart sink to my stomach. When you say £50-600 deposit utilities!! trust this was a typo but please confirm for gas, electric, water etc should not usually exceed $100pm in LA? Honestly I hadn’t even considered the energy supply aspect so thank you! Daniel.

Re: Building credit
 

—
May I ask are you from the UK? How long has it taken to establish sufficient credit to secure a mortgage?

Re: Building credit
 

Does it really matter what credit scoring agency your lender use? In my experience from the UK, some use Experian and others Equifax! In the USA can you opt to have your record drawn from the most generous rated agency? Thanks, Daniel.

Re: Building credit
 

Hi! Just curious to know.. assume you are British and married US citizen. How long did it take you to establish sufficient credit in order to take out a mortgage in the US? Is the amount they lend you similar to UK rules? 4 x annual salary? Thanks, Daniel.

Re: Building credit
 

Yes, I am from the UK.

I (we) bought 16 months after I entered on my CR-1 (11/2001) - my wife is a USC, lived in the US all her life prior to us getting married, when she spent almost two years in the UK IOW she had a decent credit score of her own.

I do not know if I could have qualified earlier, but I switched jobs and relocated to another state, so buying earlier wasn't something we considered, at least not in terms of submitting a mortgage application. .... Per oft-repeated advice here on BE, buying immediately after you arrive, before you're settled, might be a catastrophic mistake, and it would have been for us!

I/we qualified on my income (my wife wasn't working at that time), and I had only had been in my current job for two months at that time. We only borrowed apparently about half what the bank was apparently willing to lend! :blink:

Re: Building credit
 

No it is not a question of which agency, but the scoring method. Most lenders use FICO scores but, contrary to popular belief, there are many versions of the FICO score. The more recently introduced Vantage score (which Credit Karma uses) also has different versions.

For monitoring your own credit, the information that matters is the trend. So as long as you use the same score consistently you will be able to monitor how things are going.

Re: Building credit
 

Bob was talking about deposit fees to get the utilities up and running, not the recurring monthly use charges. It was not a typo.

Rene

Re: Building credit
 

When you buy a place you pay a one off $500-600 for utilities deposit? Assume this isn’t the case if you rent?

Re: Building credit
 

Thank you I will do this!

Re: Building credit
 

Interesting thanks for coming back to me!

Re: Building credit
 

Ur welcome. :)

Re: Building credit
 

Yes this can be the case even for a renter! It depends if utilities are included or not.

Re: Building credit
 

Some rentals include some utilities (I think water is most likely) but not all do. I believe that (some) utilities are more often included in apartment rentals (blocks of flats), but much less often in rented single family (detached), duplexes (semis), or town homes (terraced homes).

Re: Building credit
 

You have no US credit. Be prepared to put down a deposit, ranging from $50-600 to every utility.

Be happy if they ask for less, but still budget for it.

You'll get it back of course, but it's still a up front set up cost to have in mind.