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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.

  1. No US credit lender will offer credit unless you have a social security number (SSN). Therefore, get an SSN first.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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 payment."

Of course now, from my point of view, no credit is even better... but that's a different article.

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