How To (Re)Build Your Credit History
My wife and I help two Ukrainian refugee families and the other day we had a conversation on building a credit history, a subject that even many Americans struggle with. So in this video, I'd like to share a few tips on how new immigrants and even US residents can build their credit history fast.
Open a Bank Account
You need to open a bank account first. You will use it to make various payments, including credit card payments. Bank of America is a good place to start with as it is very immigrant-friendly.
Get a Secured Credit Card
This is a big one, get a credit card. Without a social security number and lack of credit history, a secured credit would you only option for now. Put a $500-$1,000 collateral and start using your card immediately. But be disciplined and smart about it.
Pay Your Rent On Time
If you have a lease agreement under your name, make sure to pay your rent on time. This will help only if your landlord is enrolled with a rent-reporting service.
Pay Utilities On Time
If you have utilities under name, be sure to pay them on time. If you are late or miss a payment, it will be reported to a credit bureau and will negatively impact your credit score.
Become An Authorized Credit Card User
Become an authorized user on someone's credit card who already has an impeccable credit history. While adding someone as an authorized credit card user is usually reserved for family members, if you know someone who trusts you, consider asking them to add you as the authorized user of their credit card. This will help you establish your credit history faster as the primary account holder's history will be added to your report.
Finally, be patient and disciplined. Building a good credit history takes time and if you make all payments on time and don't overuse your credit limits, in about 6 to 9 months you will see the first fruits of your labor and will get access to unsecured credit cards and other credit products.