Credit in a New Country:

A Guide to Credit in the United States

Getting Started

Millions of Americans don't have credit histories because they haven’t established credit with traditional lenders. These consumers may rent their homes or apartments, use checkcashing outlets for payday loans, or buy their furniture and appliances from rent-to-own stores. There are efforts underway to give these consumers some “credit” for paying those kinds of bills on time.

First, Fair Isaac Co., creator of the popular FICO scores (see below) has developed a new credit score based on information from companies that don’t traditionally report to credit reporting agencies. If you haven’t established a credit history with the three major credit bureaus, some lenders will be able to access one of these non-traditional FICO scores. At this time, it is not yet widely used but likely will be in the future.

Another new credit-reporting agency, Pay Rent Build Credit (www.PRBC.com) also gathers information about non-traditional credit transactions. PRBC is the first organization ever to help consumers build an accurate bill payment history with rental, utility, and other recurring bill payments. Building your credit history through PRBC is free. Simply visit the website to enroll and learn how to create your credit history.

To get your first credit card, you may need the following:

• Valid Social Security number or Tax Identification number (see below)
• Proof of your address, such as a copy of a utility bill in your name
• Proof of income such as a copy of recent pay stubs or W-2s
• A checking and/or savings account in your name Every creditor has different requirements, so be sure to ask about the lender’s minimum requirements before you apply.

Students

If you are a college or university student, you may want to apply for a student credit card. These cards typically do not require an established credit history or strong income. Applications are often mailed to students or available on campus.

Social Security Numbers

Generally, to get a major credit card or other loans, you will need a valid Social Security number first. You can get a Social Security number from the Social Security Administration (www.SSA.gov) by filling out form SS-5. You can also visit a local Social Security office. You can usually get a Social Security number as long as you are eligible to work in the U.S.

If you are not eligible for a Social Security number, you may instead want to apply for a Taxpayer Identification Number (TIN) through the Internal Revenue Service (IRS). Visit www.IRS.gov or contact your local IRS office.

Secure Credit Cards

One of the fastest ways to get a credit card and establish a credit history can be a secured credit card. With a secured card, you place a deposit with the issuing institution. You will get a MasterCard or Visa card with a credit line that is usually equal to your deposit. You can use the card anywhere that MasterCard or Visa cards are accepted. Ideally, you should choose a secured card that reports your monthly payment history to all three major credit-reporting agencies. Visit www.BankRate.com or www.CardRatings.com for a list of secured credit cards.