August 31, 2008

Experiences Relocating to the USA (Pt 5) - Building a US Credit History

Some advice and guidance based on my relocation move to the USA in September 2003. Part 5 - Building a US Credit History

Building a US Credit History

One of the really big medium-term priorities when arriving in the USA is to get integrated into the financial system and establish a US credit rating.

The whole US lending system revolves around your credit score, so you need to make it a priority to build up your score -- and you have to expect to receive slightly worse interest rates until you do.

There are many articles written about the "secrets" behind the US credit rating system, but the basic steps to build up a good credit score are very simple:

  1. Get a bank account
  2. Get a Social Security Number
  3. Get a credit card -- but not too many!
  4. Get a term loan, such as a car loan
  5. Get a mortgage
  6. Pay your bills regularly and on time!

Opening a bank account should not be too hard if you have some reasonable amount of funds to deposit into that account. If your employer has any existing relationships with banks and financial institutions then you may get some beneficial treatment from them if you show them your letter of employment and agreed to get your salary direct deposited into your account.

Getting a credit card / term loan / mortgage can be a much harder task, and can take some time but is crucial for building up a good credit score. Having an existing account with a financial institution and having an employer who has existing relocation relationships can both help, but ultimately your task is to provide proof that you are creditworthy. Many people find Credit Unions more willing than Banks to accommodate non-standard circumstances (such as newly arrived workers with little or no credit history), so it is worth asking around to understand your options. You should take copies of your UK credit history and credit reports with you and talk to the bank staff about what services they can offer you.

Another useful tip if you have a credit history with an organization that operates in both the UK and USA is to try to transfer your existing UK account to the US unit.
For example, if you already have a personal American Express (AmEx) card in the UK then you can talk to the US AmEx folks and get your account history transferred over -- which will give your US credit score a big boost because you will show up as having an existing credit account history.

You will also require a US Social Security number for your US employer, but make sure you get all your accounts linked to that SSN. The steps for getting a SSN issued are described on the Social Security Administration web site, and you just need to talk to them and follow their process - http://ssa.gov/ssnumber/

Next: Part 6- Buying a House

Experiences Relocating to the USA from the UK

  1. Experiences Relocating to the USA - Part 1 - A New Beginning
  2. Experiences Relocating to the USA - Part 2 - Moving All Your Worldly Goods Half Way Round the World
  3. Experiences Relocating to the USA - Part 3 - The One-Way Ticket
  4. Experiences Relocating to the USA - Part 4 - Culture Shock - Two Nations Separated by a Common Language!
  5. Experiences Relocating to the USA - Part 5 - Building a US Credit History
  6. Experiences Relocating to the USA - Part 6- Buying a House
  7. Experiences Relocating to the USA - Part 7 - Learning to Shop
  8. Experiences Relocating to the USA - Part 8 - Was The Move Worth It?
Entry categories: General
Posted by Jorgen Thelin at August 31, 2008 10:16 PM - [PermaLink]