Credit in a New Country:

Guide to Credit in the United States

Mortgage

It is possible to get a mortgage even if you don’t have an established credit history. To learn how to buy a home for the first time, review our publication Buying a Home, available free at www.ConsolidatedCredit.org in the Learning Center.

Traps and Scams to Avoid

Advance Fee Loan Scams: You should not have to pay a fee in advance to get a loan. The Federal Trade Commission reports that in one year nearly 4.5 million consumers paid advance fees but did not receive the promised loan or card. For more information on advance fee loan scams, or to report one, visit the Federal Trade Commission’s website at www.ftc.gov (click on "consumer" then on "credit.")

Guaranteed Unsecured Credit Cards: Be very suspicious of cards that guarantee you that you will be approved. These comeons usually fall into one of two categories.

1. * Cards that may sound like major credit cards, but can only be used to buy merchandise from the companies' catalog. These cards usually are not very helpful in establishing credit. In addition, the merchandise may require large down payments, and be overpriced.
   
   
2. * Cards that are major credit cards but carry very high fees. You may get a starting credit line of $300, for example, but the fees on the first bill may total $250 or more, leaving you with very little available credit. Unlike a secured card, where your deposit will be returned if you pay your bills, you will never get those fees back.

Payday Loans: Check cashing outlets will allow you to borrow against your next paycheck, for a fee. The fees on these short-term loans are so high, however, that the effective interest rate can be over 400%! In addition, if you cannot pay back the loan in full with the next paycheck it will be rolled over to the next, and you may end up in a vicious cycle where you are unable to ever pay off the loan.