The International Student’s Guide to Moving to the United States: How to Establish Credit History

The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of World Education Services (WES). WES does not offer financial advice, and recommends that you conduct your own research and consult with a financial professional before making any final decisions related to your financial management. 

Your credit history is a detailed record of how you have managed your financial obligations. Credit history plays a big role in establishing yourself financially in the United States. Each time you apply for a new credit card (also referred to as “opening a line of credit”), apply for a loan, or establish a utility service account such as electricity, phone, or internet, those companies will report on your outstanding payments and payment history. This information contributes to your credit history. Your credit history includes a three-digit credit score and additional information on your open credit accounts, debt, and payment behavior.  

In the U.S., there are several benefits to having an established credit history with a good credit score. If you do not have credit history or have a low credit score, you could face some challenges that make it difficult to settle in the U.S., such as: 

• Declined credit card applications  
• Less favorable terms on a bank loan  
• A high security deposit for housing  
• Rejected housing applications

The good news is there are several ways to start building a credit history in the U.S. as soon as you arrive on campus—even before you have a Social Security number. 

There are five key ways to efficiently build your credit history in the U.S. as an international student: 

• Transfer your credit score to the U.S. 
• Apply for a secured credit card. 
• Establish a relationship with a U.S. financial institution. 
• Apply for U.S. credit with a co-signer. 
• Pay your bills on time and monitor your credit score. 

Let’s discuss how each of these may help you to establish yourself financially in the U.S. 

Transfer your credit score to the U.S.

There are many ways to establish your credit history in the U.S. One method is to use a service like Nova Credit to transfer your international credit history to the U.S. 

Nova Credit helps newcomers share their international credit history with partners like American Express and Verizon to make it easier to get approved for credit cards, loans, phone plans, and other products. Once you receive a U.S. credit product, like a credit card, you can start building credit history in the U.S.  

Nova Credit currently connects to international credit bureaus in the following countries: Australia, Brazil, Canada, the Dominican Republic, India, Kenya, Mexico, Nigeria, South Korea, and the United Kingdom. 

Apply for a secured credit card

If you cannot transfer your international credit, consider applying for a secured credit card. A secured credit card requires you to put down a cash deposit at the issuing financial institution, such as a bank or credit union. Your spending limit is generally the amount that you have deposited. 

Important: The issuer of your secured card should report your payment history to at least one of the three major credit reporting companies in the U.S: Equifax, Experian, or TransUnion. If your payment history is not reported to one of these agencies, your secured credit card won’t help you establish credit history in the U.S. If your secured credit card provider doesn’t disclose this information on its website, we recommend contacting its customer support team for clarification. 

It is also a good idea to look for financial institutions that will accept multiple forms of documentation from immigrants. Visiting a local bank or credit union in person and explaining your situation can sometimes be more effective than applying online. Many times, bank agents can easily check whether or not they can pre-approve you for a card. 

Establish a relationship with a bank or credit union

Opening a checking or savings account with a bank or credit union may put you on a path towards building credit. As you develop a relationship with the financial institution, you start signaling financial stability. This may help you secure a credit card or loan with the same institution in the future. 

Before selecting a bank or credit union, consider your priorities and ask yourself some key questions: 

• Is there a bank or credit union branch near me?  
• Does it provide accessible ATMs?  
• How is the customer service experience?  
• Does it charge monthly or annual fees?  

Important: After you open a checking account, do not overdraw your account balance. This will negatively impact your U.S. credit history.

Apply for U.S. credit with a co-signer

Another way to receive your first credit product is to apply with a co-signer who has established credit history in the U.S.  

Before applying, make sure your co-signer understands what they are agreeing to. A co-signer will be held responsible for your debt if you don’t pay your bills. Research co-signer options when you apply for different credit cards or loans to determine if this is the right option for you. 

Pay your bills and monitor your credit score

Once you obtain your first credit card in the U.S., be sure to make your credit card payments on time to demonstrate your financial stability. Consider enrolling in automatic bill payments, if possible. Rent reporting may also affect your credit score, so it’s important to make your monthly housing rental payments on time as well. 

After a few months of payments, your financial institution will report your activity to U.S. credit reporting agencies. You will then start to build credit history in the U.S., making it easier for you to get approved for credit products in the future. For instance, if you make payments on –time, you may become eligible for a credit card that doesn’t require a security deposit. 

Check your credit score regularly and consider applying for multiple credit products, which may help you build credit faster. We recommend using free credit score and monitoring tools from Credit Karma or NerdWallet. It is important to note that each time you request an official copy of your credit report from one of the major credit reporting agencies, it could actually hurt your overall credit score. That is why we suggest taking advantage of free tools and services such as the ones named above. 

Next steps for building credit history in the U.S.

Credit will play a critical role in your new life in the U.S., but it requires patience. Credit history takes time and discipline to build. Fortunately, you don’t have to start from scratch if you have just moved to the U.S.  

Using Nova Credit, you may be able to apply for certain credit products in the U.S. using your international credit history. If you are unable to use this service, we recommend that you explore the other methods for building credit that we have shared in this article. 

In the next article in this series, we will review other helpful products and services to begin your life in the U.S. such as a phone plan, housing, and more. In the meantime, refer to Nova Credit’s full Immigration Guide to find more helpful resources as a newcomer to the U.S. 

Related Reading

The International Student’s Guide to Moving to the United States: Funding and Visas