Getting a Credit Card with No Credit History as an Immigrant
Getting a credit card with no credit history as an immigrant is getting easier. Establishing credit is one of the most important financial actions a new immigrant needs to take when moving to the U.S. One of the best ways to do so is with a credit card. As someone new to the Country your lack of credit history can limit your options. No matter how good your finances were in your previous Country, you’ll need to start from scratch in the U.S.
Even without any credit history, an immigrant can still secure a card as long as they know where to look. Continue reading for a roadmap to your first credit card as a U.S. citizen and what you need to successfully apply.
How Does Your Credit History Impact Credit Card Approval?
In the United States, your credit is built when banks, credit card companies, and other financial institutions report your payment history to one or more of the 3 main credit bureaus. This creates a sort of catch-22 where you need credit to build credit.
Credit card issuers pay attention to your credit report as it represents a report card for your financial health. Your credit score is a 3-digit number generated from information pulled from that report. The particular factors that influence your credit score include payment history, credit mix, length of credit history, amounts owed, and new credit.
Credit card companies take this data in mind along with income information and other personal details. Without a credit score, you’ll need to take steps to build up your credit history before applying or opt for a secured card.
What Types of Credit Cards Can You Get With No Credit History?
As a new immigrant without a credit history, your credit card options are slightly limited. With that said, there are several different card types designated for those new to credit. The options listed below give new citizens the best chance at approval while still allowing you to build credit with them.
Secured Credit Card
A secured card is one of the best starter credit card types for those looking to establish and/or improve credit. With a secured card you’re required to maintain a deposit in your account that functions as the spending limit for that card. This allows those with poor or no credit to get approved for a card and start building up their score. Payments you make on a secured card are reported to the credit bureaus, which means they build credit just like traditional cards.
One of the best secured options for new immigrants is the Sable Card.
Store Credit Card
Retail store credit cards function like traditional credit cards, but can only be used at a single store or network of stores. These store cards sometimes offer an easier path to approval, but they come with their own pros and cons. As a benefit retail cards report your payments, which means they can help you build credit. On the other hand, they can enable poor spending habits and lead to debt.
Traditional Credit Card
In some cases, you may still be able to secure a traditional credit card without an established U.S. credit history. A couple of the best credit card options for new immigrants include the Petal, Deserve, and Jasper Cards. On the other hand, you may have better luck getting a credit card from you current bank if it operates in the United States. For Example, the State Bank of India (SBI) operates foreign branches throughout the world.
Additional Ways to Build Credit as a New Immigrant
There are plenty of ways to establish and build up your credit history as an immigrant without the use of a credit card. Listed below are just two of the many options.
Become an Authorized User
An authorized user on a credit card can make purchases and the account will show up on your own credit report. It’s important to make sure that you trust the person whose account you want to become an authorized user on. If they miss payments, it will affect your own credit.
Credit-Builder Loan
Credit-builder loans are designated for those with poor or no credit. You can still qualify without proven income, but you don’t receive the money upfront. You are still required to pay some interest as you make periodic payments. The benefit of this type of loan is that payments are reported and help your credit.
Establish Good Credit Card Habits
Credit cards can be tools or burdens depending on how you use them. As a new immigrant, it’s important to practice good credit habits as soon as you open up an account. Your credit score won’t go up overnight, but there are ways to streamline your progress. Visit the Upwardli Blog for more financial advice.
