Building an impressive credit score is one of the first steps anyone immigrating to the U.S. should consider. A credit score is a three-digit number that banks and lenders use to decide whether to approve someone for a loan or credit card and what interest to charge. A credit score tells the lender how reliable you are as a borrower and how you’ve managed your money in the past. This is called credit history; the better your credit history, the higher your score and the more appealing you will be to the lender.
But, in today’s world, the importance of good credit extends far beyond getting approved for a credit card or loan. In fact, your credit score can affect everything from where you work to where you live. These days, many employers and landlords review applicants’ credit history and score before making their decisions. Having a lower credit score will limit the opportunities you have.
With this in mind, an important question for many immigrants is “how can I build credit history without a social security number?”
Most people believe that a social security number is required when applying for a credit card or a personal loan, but this is not always the case. For example, many institutions allow applicants to provide an individual taxpayer identification number (ITIN) instead. An ITIN is a nine-digit number issued by the internal revenue service (IRS) for people who do not have or qualify for a social security number. You can apply for an ITIN by contacting the IRS and providing the necessary documentation.
If you have no credit history to show the card company, there is another option to help you build credit: a secured credit card. Secured credit cards are different from regular credit cards in that they are much easier to qualify for. Why? With a secured credit card, you put down a deposit as collateral. This deposit is usually equal to the credit limit allowed on your card.
Perhaps you don’t think a credit card is the right first step for you. A simple, easy, and secure way to do start building credit history is to open a bank account in the U.S. Like credit card companies, banks can help you secure a credit score because they too report information about consumers to credit bureaus. Also like many credit cards, you can open a bank account using your ITIN number, and even your passport or alien identification number.
Building credit is an essential part of securing your future in the U.S., and how you do it is up to you. It may be more achievable than you realize!
Visa Business Plans is led by Marco Scanu, a certified coach from the University of Miami with a globally-based practice coaching Fortune 1000 company executives, entrepreneurs, as well as professionals in 4 different continents. Mr. Scanu advises clients on turnaround strategies and crisis management.
Mr. Scanu received a bachelor’s degree in Business Administration (Cum Laude) from the University of Florida and an MBA in Management from Bocconi University in Milan, Italy. Mr. Scanu was also a Visiting Scholar at Michigan State University under the prestigious H. Humphrey Fellowship (Fulbright program) with a focus on Entrepreneurship, Venture Capital and high-growth enterprises.
At present, Mr. Scanu is the managing partner and CEO at Visa Business Plans, a Miami-based boutique consulting firm providing attorneys and investors with business planning services in the areas of immigration and SBA loans.
The following sources were consulted when creating this blog: