Guide to Building Credit As An Immigrant to the U.S….

How the U.S. Credit System Is Different than Other Countries

Coming to the United States can be an exciting journey for immigrants. Aside from acclimating to a new place with new people, immigrants face another challenge that many of us do not consider: starting out with no credit history. Whether we realize it or not, the United States credit system determines much of what we can and can’t access: a cellphone plan, an apartment rental, even TV service.

Unfortunately, even those with an excellent credit rating in their home country won’t be able to transfer it over to the United States. This guide is designed to help immigrants start off strong and make the right moves to build the credit they need.

In this article:

What Is Credit in the U.S.?

Building credit in the United States can be boiled down to five factors, each of which impact your credit score differently. These factors include: payment history, credit utilization, credit history, new credit extended, and credit mix.

Getting any type of credit begins by filling out an application, which usually asks for your Social Security number (SSN). Since Equifax and TransUnion provide credit reports for many countries, it’s sometimes possible to apply for credit using another country’s passport or ID. Alternatively, you can apply for an Individual Taxpayer Identification Number (ITIN) and use this for any credit application (more about that later).

Ways to Build Credit

Getting to the coveted 750+ range is not impossible for those new to the United States, as long as you pay attention to the factors that affect your credit. Building credit can seem like a big ordeal, but remember that there are specific steps you can take to get started. Here are some ideas that can help people without credit get on the fast track to a sky-high credit rating.

Secured Cards

Although they only make up 1% of all credit cards, they are a great first step.  To open a secured credit card, a deposit in the amount of your desired credit limit is required, and you will start building credit by showing that you can make payments on time. This deposit is returned to the card holder if the account is in good standing if or when you choose to close it. Secured credit cards are typically easier to get approved for than traditional cards, as the risk of offering a line of credit is lower because of the deposit.


Taking out a loan should not be done only for the sake of building credit. However, if you find that you need a loan, your on-time payments can help prove a history of good credit. Always have a plan to make on-time payments, or else that loan could come back to hurt your credit score. 

Lastly, remember the hard credit inquiry that is usually required to take out a loan in the first place can adversely affect your credit score in the short-term. And since most lenders require a minimum credit score, you can’t always count on that hard inquiry leading to approval.

Getting credit for paid bills

Historically, on-time utility and rent payments have not been included by credit bureaus to determine your score. These days, bureaus like Experian may offer tools to help you include utility bills on your report to support your good credit history. 

Unsurprisingly, this requires having the bill under your name and being able to prove that you have had no late or missed payment on the account. This may not always be a reliable way to build credit, and should not be used as your only credit-building strategy, but can help the big picture.

Ensure Your On-Time Credit Card Payments Are Reported

Having on-time payments is key in determining your credit score. Credit Karma lets you see your credit score from Equifax and TransUnion, and one of their categories include payment history. In the unfortunate event that your on-time credit card payments aren’t being reflected on your score, you can contact each credit reporting company (Experian, TransUnion, and Equifax) to sort things out or file a dispute.

How to Establish Good Credit History

There is no easy, one-step method towards getting good credit. However, by following certain steps you can enjoy the benefits of climbing up the credit score ladder. Most experts agree that improving your credit score in the U.S. requires having a mix of credit types (car loan, home loan, student loan, credit card loans), paying all of your bills on time, and using a moderate amount of your approved credit.

Having different types of credits allows companies to see that you can manage different types of loans, while avoiding late payments assures lenders that extending credit to you isn’t a risk. It’s recommended to keep card balances under 30% of the total credit limit, and those who stay below the 30% mark oftentimes see improvements to their credit score over time. Maintaining your balance too high creates fear that the card holder will suddenly stop making payments and default on their debt.

Here are also things to avoid. Try to apply only for the cards you need, since each application will require a hard inquiry and this lowers your score. Avoid late payments by setting up automatic payments with your bank, even if it’s the minimum payment amount.

How to Check your Credit 

There has been an increase in websites and banks that let you check your credit score for free. Most of the time these websites are able to offer this service for free because they get a bonus if you apply for suggested credits cards or loans on their website. But these aren’t the only way you can keep an eye on your credit for yourself. 

There are four major reporting agencies in the U.S. The fact that companies like TransUnion and Experian exist in other countries doesn’t mean that your scores can be transferred. Each country weighs factors differently when determining your score. The following provides a brief explanation of the four major agencies in the U.S.


This company had a huge security breach that affected more than 140 million people. The class action lawsuit ended in a $750 million settlement. This company uses different factors to determine a score from 300-900 that helps lenders determine if an applicant should be approved for credit.


This agency uses similar factors in determining your credit score. One major difference is that they don’t consider department store credit cards when calculating your score, unlike TransUnion. 


Along with the other credit reporting agencies, TransUnion looks at payment history, number and types of credit lines you have, and how much of your credit you are using. Checking this agency’s score and following suggestions for improving your credit score will benefit you later on if you decide to apply for a loan. 


This is the smallest of the four and is a subsidiary of CBC Companies. Most lenders tend to overlook Innovis when making decisions on credit applicants.

How to Build Credit Without a Social Security Number

Moving to the U.S. filled with hopes of a better future is a shared sentiment that can be stopped in its tracks when you realize that credit is needed for a lot of different things. It’s important to realize that lacking a Social Security number (SSN) doesn’t prevent you from building credit. There are companies that accept alternate forms of ID, such as an Individual Taxpayer Identification Number (ITIN). If you are lawfully employed and pay taxes, then you are eligible to apply for an ITIN and can use this to apply for certain types of loans. Other ways to sidestep the SSN requirement is using a foreign passport or ID, although the number of companies that accept this may be smaller.

How to Get an ITIN

Applying for an ITIN requires the applicant to fill form W-7 that can be found on the IRS website, along with your country’s passport or two identification documents (one of which must be a photo ID). The completed form is submitted to the IRS for approval and they will assign an ITIN depending on the final decision.

Credit Card Companies That Accept ITIN

Getting an ITIN is only half the battle. You also need to find a company that accepts this alternate form of ID. The company that is most friendly towards extending credit using an alternate form of ID is Capital One. They currently have different credit card options to fit your credit card needs. The Chase Sapphire card application can also be submitted using an ITIN.

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