In the United States, one of the most important parts of overall financial health is having a good credit score. Those that have a good credit score will be able to qualify for better rates on mortgages, auto loans, and a variety of other loan types. Those with poor credit scores – or no credit at all – may struggle to be approved and could also have issues renting an apartment or qualifying for certain jobs.
Building a good credit score can be a lengthy and challenging process for anyone. However, it can be even more of a challenge for someone that is not a citizen. Fortunately, there are many ways that someone without US citizenship can still build a strong and positive credit score.
If you’re not a citizen, you first need to make sure that you obtain the proper identification needed to apply for any type of loan. Non-citizens that are eligible to work in the US are also eligible for a Social Security Number. Additionally, you could also apply for a Tax ID Number (TIN) provided by the IRS. These are typically required when you apply for any type of loan.
Start Building Credit Immediately
One of the first things that you need to do is to start building your credit immediately. One of the challenges that immigrants have is that they have a lack of a verifiable credit history. You can change this very quickly by getting a credit card and making your first payment on time. Even if you have no credit history, you can still qualify for a number of different credit card programs. These can include low-balance and fully-secured credit cards, which will be secured by cash you provide to the bank. Additionally, if you have a qualified co-signer, their additional signature could improve your chances of approval.
Get Credit for Rent
For non-citizens that are looking to build a positive credit history, having rent payments included on their credit reports is very important. Unfortunately, not all landlords make it a habit to report your rent payments to the credit bureaus. However, each of the credit bureaus has an easy process that will allow your landlord to start reporting your payment history. If you are able to sign up for electronic payments and make all of your payments on time, your score should start to improve very quickly.
Make All Payments on Time
Once you’ve been able to establish any type of credit history, you will have an easier time qualifying for additional types of loans and credit. However, in order for you to have a good credit score, you need to make sure that you are being responsible with your credit. The most important thing that you need to do on a regular basis is to make all of your loan, rent, credit card, and other bill payments on time. When you can do this routinely, you will help to improve your score. However, if you are late on even one payment, it could end up being very detrimental towards your overall score.
Monitor your Credit Report
Once you have started building your credit, it is important that you continue to monitor it as much as possible. All people with credit histories are vulnerable to identity theft. If you are a victim of this, someone could open up an account illegally in your name. In these situations, they could end up racking up a lot of debt, missing payments, and ruining your score. To prevent this from happening, it is important that you monitor your credit report. All of the credit bureaus are required to provide you with a free report at least once per year. If you notice that something is fraudulent or incorrect, you could contact the creditor yourself or utilize the services provided by credit repair services.
Take Advantage of Preparation Services
One of the main advantages of having a good credit score is that it will help you to qualify for an affordable mortgage. Owning a home is a great way to build long-term wealth, but having a poor credit score could get in your way. When you are looking to build your credit score, taking advantage of mortgage preparation services could be a great option. These services will be able to help you by fully analyzing and assessing your current report and figuring out ways to improve your score.
If you’re not a US citizen but want to improve your credit score, the services provided by Build My Scores could be extremely beneficial. Our professionals can help you fully understand the credit reporting process and get you on the path to a better score today.