No History, No Credit... No Kidding!
It is most frustrating for those emigrating
from another country
I receive a number of E-mails and see numerous
postings concerning how to establish credit when all a creditor
needs is history and the only thing that can create history is
having credit. It is a never ending circle. And though
frustrating for a youth trying to get his first car or someone
just out of bankruptcy, it is most frustrating for those
emigrating from another country who already have good credit in
their native land. It just doesn't seem to matter to creditors
but there's more than one way to skin a fish.
So this article is directed at establishing
credit in general but also offers special tips for folks new to
the US. But fear not, native citizens-- for you, too, can gain
much from some of the following.
"We've had Canadians buying homes in the US.
If they have/had a Canadian SSN# [SIN], adding that info to the
credit request using TRANS UNION, will bring up some Canadian
history. Apparently TU has reciprocation/an affiliate in Canada,
and their credit can be pulled that way. We have had no luck
with EFX and XPN,though."
That's pretty solid information. Similarly, US
Credit For Canadians offers these tidbits some of which can be
used by all of us.
- No US credit lender will offer credit
unless you have a social security number (SSN). Therefore,
get an SSN first.
- Many companies offer credit cards. Apply
for a card only at a well known, well established, and
reputable lender regardless of rates. Examples could be
Chase-Manhattan, Bank of America, Wells Fargo, American
Express, and similar institutions.
- Apply in person and not on-line as there
is usually no way to indicate you have prior history in
another country. Ask in advance if they can verify your
native country history.
- It should not take long for the results.
If within 2 weeks you have not been notified, follow up. Do
not expect a yes answer. But when refused, ask to speak to
the decision maker. Ask them for a re-review only this time
emphasize your native country Identification Number. If they
will not re-review your application, go to another more
notable institution and try again.
- Continue to follow-up. Often times sheer
persistence can get the job done. If the result is still no
and this is your second full attempt, your next option is
applying for a secured credit card or offering a co-signor.
Both of these options are discussed in the above referenced
article Establishing Credit.
- Remember all you are trying to do is get
a foot in the door and just the smallest amount of credit at
any interest rate will do it. Once established you will soon
be flooded with far better offers.
The Center For Debt Management offers an
article entitled How To Build A Credit History And Establish
Credit. Much of its data you have read. But this excellent
site offers one paragraph especially worth noting. It says:
"If you do not have a credit history, you
should begin to build one. If you have a steady income and have
lived in the same area for at least a year, try applying for
credit with a local business, such as a department store. Or you
might borrow a small amount from your credit union or the bank
where you have checking and saving accounts. A local bank or
department store may approve your credit application even if you
do not meet the standards of larger creditors. Before you apply
for credit, ask whether the creditor reports credit history
information to credit bureaus serving your area. Most creditors
do, but some do not. If possible, you should try to get credit
that will be reported. This builds your credit history."
And finally, Establishing credit is only one
step. Credit is not free, so use it wisely. One Money Management
International offers perhaps the best concluding remark possible
when it says: "Establishing credit is only one step. Credit is
not free, so use it wisely. One question you should ask yourself
is 'How much credit can I afford?' A good rule of thumb is to
own no more than 20% of your net income for consumer debt
excluding mortgage or rent. Yes, this does include your car
Of course now, from my point of view, no
credit is even better... but that's a different article.