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It can be a little depressing knowing that your good financial habits back home basically count for naught once you step foot in the US, but there are ways to get leg up once you arrive.
Why do I need a credit history? Everything seems to be based on your credit history and score. Obviously any institution you seek a loan from will perform a credit check, but there are other reasons as well.
The easiest and cheapest way to apply for electricity, gas, water, internet and phone accounts involves a credit check. If you don’t have any history there’s nothing to check and I know that I’ve had to pay an extra $50 “bond” for my mobile phone and to get electricity and gas to my apartment.
While these tips mostly won’t help you for that initial set up period, where you’re getting settled into a new house or apartment, the faster you begin building your US credit history, the better.
Disclaimer: I’m not a financial wizard or guru. I did General Maths in Year 12 and even that was a stretch. All of this advice is based on my research and it’s best to do your own as well, to ensure you’re doing the right thing for you.
Here’s a quick breakdown explaining how your credit score is calculated in a pretty graph.
Social Security Number
Secured Credit Card
The limit of a secured credit card depends on the amount you’re willing to put down as a refundable security deposit. You don’t need a credit score or report to apply for most of these cards and they work really well if you’re looking at building your US credit history. The credit limit on a secured credit card will vary according to who is issuing it and are usually between 50 and 100 per cent of the deposit.
Some issuers will offer bonus points or cashback incentives for using their credit cards. Just remember to keep your spend below 50% of your credit limit for the best chance at a great credit score. Here’s the lowdown on some of the best secured credit cards in 2017.
Pay Bills On Time
I’m putting this one last because I’ve only heard about it in passing so I can’t back it 100 per cent. Get yourself an American Express card in Australia (or wherever you’re from) a few months before you move to the US. Make sure you pay it off on time and try to pay it in full. When you move to the US, you’ll be able to switch that American Express Australia account to a US one.
Those are my tips on building your US credit history. Now tell me your experiences!
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