Building Credit As An International Student
February 26th, 2014 by Jennifer Frankel
The United States relies heavily on purchases made with credit cards and debit cards. While cash is still accepted by many merchants, international students have a tough time making the adjustment. It’s important if you recently arrived to the US as an international student, that you build your credit wisely. Your credit score can affect many aspects of life in the US including getting an international student loan, renting an apartment, buying a car, and more. A good credit score can make life in the US a lot easier!
To get a credit score, you do not need to be a US citizen or permanent resident – you just need a tax identification number (TIN) which you can have a J or F visa holder. Regardless of your immigration status, many employers, banks, and insurance companies will look at your credit score to determine your ability to pay on time.
The problem for many international students is that they haven’t been in the US long enough to build credit as an international student. The sooner you start this process, the easier your future will be for the rest of the time you remain in the United States. It can take anywhere between 6 to 12 months to build your credit, so be patient.
1. Get a credit card
You don’t need a high credit limit on your credit card, you just have to show that you can be smart while managing your money. This means that you need to make sure you borrow money and pay it back on time. Here are some additional tips on getting a good credit score:
- Only charge 20% of your overall credit limit
- Only complete the application if you are serious – applying for multiple credit cards can lower your credit score
- Make at least your minimum payments on time
- Don’t exceed your credit limit
2. Rent an apartment or home
Many apartment complexes report your on time payments directly to the credit bureaus. Be sure to confirm that they do, and if not – be sure to contact them and ask if they can report this. This can help boost your history.
The three credit bureaus in the US, Experian, Equifax and TransUnion, that collect information based on your debts and use of credit. This includes credit cards, car loans, and student loans so be sure to be smart with your finances so that you can continue building your credit as an international student. Wondering why a credit score matters, check out our blog for more.