Home » Guides » A Guide to Credit-Building Techniques for US Immigrants

You’ve immigrated to the US to embark on a better life. But excitement can quickly turn to frustration and desperation when you start trying to create that life.

You go to rent an apartment and get denied because you have no credit score. You need a loan to get by, but you are rejected because you have no credit history. Need to buy a car to get to work? Once again, with no credit, you may be out of luck. But how can you build credit if you do not have loans or an apartment? You may feel like you are trapped in a circle.

Of course, you know other immigrants have made it over this hurdle. So there is a way to move forward and establish the credit you need to build the life you dream of. This guide will help you get started.

Why You Need to Build a High Credit Score in the USA

If your country of origin had credit scores, you might already have a pretty good idea of what credit history is and how it works. But the credit scores you established in your country of origin are considered meaningless in the US.

Here Are the Basics of Credit in the USA

  • There are three major credit bureaus: Equifax, Experian, and TransUnion.
  • These credit bureaus maintain credit reports on your activities.
  • Creditors you do business with send data to these bureaus which ends up on those reports.
  • The reports are used to generate credit scores.
  • You have multiple scores, but the most important two are FICO & VantageScore.
  • Your credit score is a numerical representation of the risk you present as a borrower.
  • Creditors use this number to decide whether to issue you a loan or allow you to rent an apartment.
  • The credit score is also one of the main factors in establishing the interest rates you are quoted.

Keep in Mind! Credit scores start out at 300 and go up to 850, with the highest score being the best.

FICO Credit Score Ranges

  • 750-850: Exceptional Credit
  • 680-719: Good Credit
  • 630-679: Fair Credit
  • 550-629: Subprime Credit
  • 300-549: Poor Credit

Factors That Go Into Generating Your Credit Score

  • Your payment history.
  • How long you have had credit.
  • How much your outstanding debts add up to.
  • Credit portfolio diversity.

How to Establish Credit in the USA

So, how do you establish credit score from the ground up?

First, Obtain the Basics

Begin by applying for a Social Security Number or Individual Taxpayer Identification number. Then you will need to open a bank account. A job with a steady income is also a requirement, and you’ll need the documentation to back that up.

Begin Establishing Credit

Try any of the following techniques to start establishing credit from scratch:

  • Do you pay for utilities or even a cell phone? Sign up for Experian Boost and similar credit bureau programs. Once you do so, those utility and communication bills will contribute to your score.
  • If you are currently renting an apartment or house, ask your landlord to report your payments to all three bureaus.
  • Did you belong to an international bank in your country of origin? Then open your account with that same bank in the US, and they may be willing to consider your international banking history and offer you a credit card. This can be one of the best options for Green Card holders.
  • Get someone you know to add you to their credit card account. This is referred to as becoming an ‘authorized user.’ Even if you do not actively use the card, it can help you establish credit. Just make sure the person whose card it is keeps up with payments.
  • Apply for a loan with a co-signer. If someone with good credit is willing to take on the risk of a loan with you, you may qualify for the financing you are otherwise not eligible for. By making payments on the loan on time and in full, you can establish a good credit history.
  • Try applying for a secured credit card. You will need to place a deposit or provide collateral of some nature to qualify.
  • Apply for a credit builder loan. With this type of loan, you will need money upfront to make initial payments before the loan is made available to you to use.

How to Build Credit in the USA

Now that we have discussed how you can establish credit, let’s go over some credit-building techniques you can use to continue to improve your score over the long term.

  • Regularly check your credit reports. This is free once a year from each of the three bureaus. Look for errors, and contest them.
  • Keep up with your regular bills. Set up automatic payments online if it helps.
  • Missed a single payment with a creditor? If you otherwise have a good record, call and ask if it can be canceled.
  • You don’t have to take out a huge loan to build credit. Just paying your bills on time and making occasional purchases with a credit card can do the trick.
  • Keep your credit utilization down to 30% at a maximum if possible.
  • Age your accounts when possible, even if you are not actively using them.
  • Introduce credit diversity into your portfolio, but make sure that you are doing so in a way that makes good financial sense.

Getting Started Building Credit as a US Immigrant Is a Challenge, But You Can Make It Happen

Building credit from scratch when you immigrate to the USA can feel like being forced to pull yourself up by your bootstraps. But it is not impossible. You now have a number of recommendations for helping you get started. Once you lay your initial credit bedrock, building up from there should get easier and easier. Welcome to the US, and good luck!


Financial Literacy Incentives
Financial Literacy is your own responsibility that needs to be taken care of with each decision impacting money matters. We strongly recommend you to benefit from each occasion that arises intended at helping you build your financial knowledge.