Credit in a New Country:

A Guide to Credit in the United States

One of the reasons credit is so widely available in the United States is because we have a strong credit reporting system. Credit reporting agencies (also known as “credit bureaus”) are companies that collect information about how consumers pay their bills, and sell that information as credit reports to businesses that may use them for credit, insurance, or employment purposes.

Credit reports contain four basic categories of information, including personal information (name, current and previous addresses, Social Security Number), account information (credit accounts you’ve held, the most you’ve borrowed, the current balance and whether you’ve paid on time), public record information (bankruptcy, court judgments or tax liens) and inquiries (the names of companies that have looked at your credit rating in the past two years).

Equal Credit Opportunity Act

Under a federal law called the Equal Credit Opportunity Act, creditors cannot discriminate against you because of your age, gender, marital status, race, or country of national origin.

Types of accounts typically included in a credit report include:

• Credit cards
• Department store cards
• Gas company cards
• Bank loans
• Auto loans and auto leases
• Recreational vehicle loans
• Mortgages
• Consumer finance company accounts
• Credit union credit cards or loans

Types of accounts that traditionally do not appear on a standard credit report:

• Rent payments
• Rent-to-own accounts
• Payday loans or loans from check cashing outlets
• Checking account information
• Accounts with smaller lenders
• Debit cards

Some creditors will only report your account if you are late on your payments, but not if you pay on time. Cellular phone companies are a good example of this. They generally only report accounts that have not been paid and have been turned over to collection agencies. The same is true of most medical providers. Since companies are not required to report information to credit reporting agencies, not all do. Some will report to one or more major credit reporting agencies, but not all three of them.

When you are establishing credit, your goal should be to get accounts that will be reported each month to all three of the major credit bureaus. Be sure to pay each bill on time or you may risk a late payment on your credit report. Late payments stay on your report for seven years and make it more difficult to get credit at good rates and terms.