How to get a credit history?
 

Hi,

A newbie here! We're moving over in Feb and have heard horror stories about expats being stranded with no credit available due to no credit history in the USA. We were hoping to open an account with American Express, but I'm now told that they won't recognise an account history in the US that has been opened in the UK.

We will need to take out loans/credit to buy new cars, so any tips?

Thanks

Kitten

There are quite a few other posts regarding credit history and how to go about getting it over in the US. So in addition to other information you will get on here, check through the old posts as well:)

First off, get together 2 years of credit history from the UK and bring it with you - mortgage payments, bank records, credit card payments and utility payments.

check into a company called International autosource and see what they can do for you regarding getting a car and car insurance. You will find that there is no obligation, even if you use them. You can order a car through them, move over here, find something cheaper, then cancel your order. You will get a full refund of any money you gave in advance (you don't always have to give money up front). this company will use your UK credit history, give you loans at good rates (we got .9% on a ford contour) but you pay for it in dollars and therefore get yourself a US credit history pretty quickly.

Some credit card companies (MBNA I think is one) will allow you to use your UK credit history to swap to a US credit card. Open up an American Express credit card (I'm sure other expats have done this ) or an MBNA credit card in the UK and then use this info. over here. Wait until you get here and get in touch with the American equivalent rather than ask in advance. We didn't do this, but I am sure some of the expats on here did. The other thing some expats have done is to take out a secured credit card. Pay $1,000 into a credit card and then they will give you a $1,000 credit limit. this will help you build up your credit history faster.

The other possibility, which some expats do, is to go through the company they work for. some companies will give you a credit line, which you will pay for through your salary. they will help you get car loans, help you open bank accounts and get a bank loan etc. Have you approached your company and asked for any help?

Hope this is all helpful for you and wish you luck in your new move.:)

Some useful advice there from Ben, just wanted to add a few pointers.

Ben, secured credit cards do you no favors ( I worked with Experian for 4 years) it only shows the card issuer that you can pay on time so they may then offer you and unsecured card. Most credit decisions made by lenders disregard secured cards.
As far as lenders are concerned they see you have a vested interest in paying on time since the financial institution concerned hold $x of your money. Unsecured lending is at no "risk" to the consumer.
Again information provided to you from my experience at Experian.

I would suggest the following Kitten:

Open a store credit card, unless you have derogatory information on your credit file IN THE US you will be accepted by Macys/Sears etc (John Lewis/House of Fraser equivalents) as long as you have a check card (debit card) with your bank or a credit card with another US institution (which you wont have yet so use your bank card). They give you "Instant Credit" based on you showing them a card bearing the VISA/Mastercard logo. You will also need a drivers license (US). Myself and 9 of my Brit, no credit, Visa holding, co-workers did this and all of us got a card with $1000 limit.!

Unlike the UK, the US arent too concerned about your salary, marital status, length of time with bank etc (you wont often find these questions on credit apps).

Some other pointers: Dont apply for lots of credit, it looks like your financially desperate and lenders are wary of this, from my experience it seems lenders want people who dont "need" credit.

Your UK credit history will be disregarded by almost every single lender you go to - note I said almost NOT all. It is infuriating that global organizations like Experian and Equifax cannot share information in some universally recognised format. For every one that considers it 99 will not look at it.

Credit granters base lending on a combination of things - your ability to pay back on time, the amount of lending you have right now, in relation to you salary, and your outgoing vs income.
If you are paying out 90% of your salary in outgoings lenders look less favorably on you, if you have a US credit account that is maxed out - again they look less favorably on you because it looks like you need the money.

My advice in short:
1) Department store card, spend upto 60% of the limit and make minimum payments or more for 12 months.
2) Apply for a US credit card with Capital One or Providian Bank they are "sub-prime"lenders ie for no credit/bad credit consumers. Use this card in the same way NEVER MAX IT OUT.
3) If you need car finance go with a company that will "guarantee" finance (many non-franchise dealers do this on new or nearly new cars - look through the Auto Mart (its a freebie publication available at most supermarkets). The interest rates are higher but after a year or 18 months refinance the vehicle.
I bought a BMW 323 for $24k at 14% with 20% down and after 18 months I have now traded it in on a $37k one and got a 6% rate with 10% down. More reasonable again in a year or so I may qualify for a 0% or low APR. (I hope my example helps).
The combination of 2 credit cards with low credit limits and low balance to credit available ratios, and 1 major purchase (your car) will make you look ideal for anything else you want. In fact this is the type of consumer most lenders want (according to studies).
Finally dont worry about high APRs you will not qualify for the 0% or low APR loans, car loans, mortgages or credit cards yet, however a year or so with the higher ones and you will.

Good luck

Re: How to get a credit history?
 

I strongly recommend you check Autosource for a car (phone NY 001 516 496 1816). If you have no US credit history you will find it impossible to buy a car on credit. So long as at least one of you has a confirmed job to come to and you commit to a car BEFORE you l leave the UK they will sell you a Ford/GM/Chrysler (only) at the dealer price, and on manufacturer's credit terms.

I got a car at 0% over 36 mths in December 2001 - 20% down, plus the sales tax, and 36 payments of $530 and a 4.6 litre Mustang GT is all mine! Of course cheaper cars are also available - the Ford Focus is a popular small (this is the US, remember) car right now, and much cheaper than in the UK. This is not some "weird internet deal", Autosource specialise (mostly) in selling to the US armed forces, but have this sideline in selling cars to immigrants. Autosource is only the agent and my credit deal is with Ford Motor Credit - to which I send my monthly payment, so my credit record is now coming along quite nicely! :) E-mail me for more info if you don't believe me and you think that this deal is too good to be true.

If you had had enough time to establish some usage then Amex can be persuaded to issue an American Amex card on the basis of your British usage record - but you do have to specifically ask them to check their UK business for your records.

Re: How to get a credit history?
 

Yes, the horror stories are true.

BUT I have found a nice little loop hole....
NorthSouth Quoted "secured credit cards do you no good" this isn't entirely true.... I started a secured credit card 10 months ago
with Premier Bank....I paid more than the monthly requirement each month on time....This is the best bit, I had someone tell me that works in the credit side of things, to go join BALLY's fitness and pay each month by direct debit, THIS WILL SHOW ON YOUR CREDIT REPORT, I then waited 3 months.... then went to Target and got $200 limit (very nicely paid for the PS2 for Xmas plus it was 10% off so that leaves me just under my credit limit).

My next step, I paid $100 to Target straight away, then 1 week later I applied for Credit at Ultimate electronics...within 5 mins I was approved for $1000 credit....

I now have 4 nice lines of credit building points for me nicely...
I think I have about 650 points (750-800 I think is a perfect credit score, but don't hold me too that)

I hope this helps

Re: How to get a credit history?
 

Southcoast - have you checked your credit file to see if your secured visa appears as an account, and whether the provider has reported your payment history???

This is why I said they do you no good.....

Good advice on other points though.

Re: How to get a credit history?
 

Yes NorthSouth, it does show on my credit report and it shows my payment history....I also have the Secured credit card in my wifes name (she is a US citizen) and the credit history shows on her credit report as well...

When I tried to finance a car through a dealership, (before I had done the Bally's/target/electronics thing) they pulled my credit up and it was the only thing that showed on my report...
They tried to sell the car to me at 18%....I couldn't get out of there fast enough...

Now that I have 4 lines of credit....do you think I should get anymore???....how long shall I wait before going back to a car dealership and getting a better deal....

Any advice would be greatley appreciated....

Re: How to get a credit history?
 

Indeed Am Ex won't recognise a UK account history - but you can easily transfer an Am Ex card from the UK to the US, and so you will at least HAVE a credit card. This is exactly what I did when I moved here.

The first couple of months using your Am Ex card in the US will be very annoying, as Am Ex will require authorisation for just about every purchase you make. This is because they build up a usage history for fraud purposes. With a new card, every transaction violates the usage history (because there is none).

Re: How to get a credit history?
 

Hey Southcoast

I think your 4 lines of credit are sufficient - you have obviously looked at your FICO score and where it sits right now means that pretty much anything you apply for will be granted.

However be aware that adding another line of credit may reduce your FICO score initially but over a 6 months or so of having that new line you will restore that score.

Excellent news that your secured card showed up on your report, I've heard from many many sources that they hadnt, and indeed myself had first hand experience of that... I stand corrected maybe its 50/50 - I'll look into this some more. I know that some lenders dont take it too seriously as a reliable basis for further lending.

Trasler - Amex should open you a new account in the US based on the accounts you had in the UK....When I moved here 4 years ago they opened me a Platinum charge card (based on my UK charge card) and gave me a new US credit card (Optima) based on my UK gold credit card. Both cards were absolutely independent of the UK cards and the Optima credit limit matched the one I held in the UK but they did a dollar conversion. They were so independent I closed the UK accounts some months later and kept the US accounts since.

Maybe they've changed the rules..... I'll look into this and post if I can confirm this with them and try and get you a direct phone number.


Now that I have 4 lines of credit....do you think I should get anymore???....how long shall I wait before going back to a car dealership and getting a better deal....

Any advice would be greatley appreciated.... [/QUOTE]

Northsouth, I wouldn't know if you should get anymore credit or not. When we got our mortgage, we had one credit card (O balance) one store card (0 balance), both of which had been used to activate the credit, and two car loans which we had done through international autosource. This was enough for our mortgage which we applied for just after being here one year. Once we got our mortgage though (which is solely in my husband's name because I don't have a SS number) we were offered a buy now, pay later on new appliances. When they did the credit check, they turned hubby down. One year later, everything was fine again.

When we changed our car, we went back to the same company (GM) and got .9% for 5 years with no down payment. We felt it was safer to go with a company we had already used and who knew we pay our loan/lease on time.:) We got our first two cars via international autosource but the payments were paid direct to the car companies. One was ford (.9%, 3 years) and one was GM which was a lease.