If you are new to USA, we will neither have a credit history nor a credit score. To get a score, you need to have at least 1account with a 6 months history on your credit report.
The hardest part is getting that first account to build the credit history. In this post we will go through the options of getting the credit card account and building your history
1: Request your friend/family member to add you as an Authorized user
When you are new to USA, you will not have any USA based credit cards. The best and quickest option to build credit history would be to request a friend/family member in USA to add you as a authorized user on their credit card accounts.
I would recommend waiting until you get a Social security number and then request your friend/family member to add you. Once you are added as an authorized user, this credit card account will appear on your credit history and there is no hard inquiry.
If the primary card holder has good credit history and if the account is paid on time, this will help build your credit history and improve your credit score.
2: Go to a bank directly and request for a Credit card
Few of my friends went directly to the bank, where they had a checking account with direct deposit and explained the situation to the staff and were able to get a regular credit card.
3: Build your credit history for on-time Rent payments
Experian and Transunion credit bureaus have started adding rent payments data to credit profiles. It is possible that your landlord or the property is reporting the data to the credit bureau. If you find that the rent payment history is not reported by landlord, you may be able to request the landlord or property to sign up for reporting the rent payment history.
Here is the link to Experian website with more information on the building credit history with rent payments.
If your rent payments are reported to the credit bureaus, it can help you build history and open the doors for many credit card offers in the future.
4: Apply for Secured Credit cards
Many banks offer secured credit cards to help build credit history, but most banks charge a annual fee with no benefits (like cash back or points)
US bank seems to have some of the best secured credit cards. Here are some of the best secured credit cards, with no annual fee (at least for the first year) and some benefits as a sign up bonus
- Double Miles on Gas & Groceries.
- One Club Premier Mile per net $1 spent.
- 5,000 First Use Bonus Miles plus Complimentary Companion Certificate.
- $99 Companion Certificate with renewal.
- Complimentary Baggage.
- $0 Introductory Annual Fee for the first year ($25 thereafter)
- Earn one H-D Genuine Rewards point for every $1 in net purchases.
- Redeem 2,500 points for a $25 H-D Gift Card.
- You could win a new motorcycle with the H-D Visa Free Ride Sweepstakes.
- Receive a $10 H-D Genuine Rewards Certificate.
- 1 LANPASS Mile for every $1 you spend.
- No Cap on Miles Earned.
- 5,000 Bonus Miles with your first card use.
- 10% discount on LAN purchase (up to $500) 1 time per year.
- $0 intro annual fee for the first year ($25 thereafter)
- Earn one LifeMile for every net $1 you spend.
- 5,000 bonus LifeMiles with your first card use.
- 15% Excess Baggage Redemption Discount.
- $500,000 Travel Accident Insurance.
5: Apply for entry level credit cards
You may apply for Discover credit card even if you don’t have credit history. Discover will review your application and if they cannot approve you for a normal credit card, you may be offered a secured credit card. Note that there is 45 day wait period before you can apply again for Discover card
Another option is CaptialOne credit cards. CaptialOne offers a few credit cards for average credit card.
6: Have an Amex/Citi credit card in India? leverage that relationship in USA.
If you hold an American Express Credit Card in India, you may be able to leverage that relationship to get a credit card in USA.
From American Express Website:
- Select your preferred card from our Personal Card or Business Card page.
- Click to apply online for your chosen card.
- Complete the application with your existing Account number, new U.S. home address and home telephone number.
- Once the application has been successfully submitted, we may contact you within a week for identification documentation or any additional information.
- Upon approval we will send you your new Card (we aim to have it to you within two weeks of receiving any required documents).
- Call the number on your new Card to transfer Membership Reward Points or if you wish to cancel your old Card.
From Citi Bank Website
If you are an existing Citi gold client outside the US with an established credit relationship, this experience may be able to travel with you to the US for consideration during the credit application process.
Terms, conditions and fees for accounts, products, programs and services are subject to change and subject to credit app
- Start slow with just 1-2 cards, do not apply for multiple cards at a time.
- Pay your bills on time.
- Do not go over your credit limit, in fact try to limit the usage to less than 50% of credit line.
- Protect your personal information.
You need credit history in USA to
- Avoid/minimize security deposits while renting a house or signing up for telephone,
- Get Credit cards
- Get lower interest on your Auto/home loans etc..
There are many ways to start your journey of building the credit history, you can check with a friend/family member to add you as an authorized user or apply for a secured credit card.
Once you establish some credit history, you can consider applying credit cards that will offer frequent flyer miles/points.
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