Access to credit facilities and products in the US is not possible without a good credit history.
It is therefore essential to build a credit history to be able to access products and services such as rental apartments, car lease, loans, lease, and mortgage. Below are some of the ways you can use credit cards to build credit in the US. Click here to know more about this possibility.
Credit history can also be built through transference and translation of existing credit scores from International Credit Bureau databases from other countries such as Australia, Brazil, Canada, Nigeria, South Korea, and the UK and into the US format.
This has been made possible through partnerships between Nova Credit with companies that enable the transfer of information from individual’s credit passports to the US national bureau databases. This option is available to newcomers and other people who work internationally to help them get approved for credit cards and loans without having to start from scratch.
Secured Credit Cards
Applying for a secured credit card is another way to build a credit history in the US.
It takes time for credit facilities to trust a person and give them credit services. A secure credit card has an option where an individual can deposit some cash in their bank account or credit union with a spending limit.
With the use of the credit card, creditworthiness is proven as a history of secured card payment reports that are made to credit bureaus including Equifax, Experian, or Transunion. These reports help bureaus qualify individuals for credit by considering their scores.
Applying for a US credit card with a co-signer
Applying for a US credit card with a co-signer is another way to build a credit history. This option is similar to opening a secure credit card.
The only difference is that, instead of making an initial deposit in one’s credit account, a co-signer is used as a guarantor as he or she has an already existing and established credit history in the US that benefits the applicant.
However, there should be private arrangements and an agreement between the applicant and the co-signer so that whoever is co-signing is made aware of the responsibility and he/she agrees to them since they are responsible if the debts are unpaid.
Building a Credit History
Paying on time, monitoring changing products together with being patient also contributes positively to building a credit history.
Paying bills on time demonstrates creditworthiness. Reports of the time taken to pay for bills are generated. These reports are considered to enable individuals who pay in good time to be logged in the US credit system.
This contributes to their eligibility for a credit card that does not require a security deposit. For useful credit utilization reports, individuals should ensure the use of their credit limits doesn’t exceed 10%.
Since paying bills in time is very important in building a credit history. Individuals can ensure bills are paid in time by checking payments due dates to avoid missing paying them.
Monitoring credit scores to know where one stands is also essential. There are a couple of free credit card scores and monitoring tools such as Karma and NerdWallet that could be beneficial.