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In the United States, as in many other countries, it is necessary to build a credit history to obtain loans or credits, rent a property, or even obtain a telephone line or other services.
What is the credit score?
The credit score, in Spanish: credit score or credit score, is a number between 300 and 850 assigned to you by a credit bureau to qualify your performance as a borrower or debtor and thus define if you are a trustworthy candidate, or otherwise, a risky candidate to receive a credit or loan.
The score is obtained according to your credit history, which is, as the name says, a report of your open accounts, level of debt, history of paying your bills, length of time as a debtor and other factors that summarize what it is like your compliance as a payer.
Why is it important to take care of the credit score?
In the United States, credit history and credit score are very important for get loans and low interest rates when buying a car or a house, ask for a credit card or a personal loan.
The higher your credit score, the lower the interest rate. Lower interest rates result in lower spending and give you a better chance of economic growth. It can even be an important factor in getting a job, as it proves your level of financial responsibility.
Even if you have a credit history in Mexico, it won't work for you in the United States. Therefore, it's important to start building your credit history when you immigrate.
When should you start building your credit history?
The answer is: already. As if it were health insurance, don't wait until you need it to take out it. Remember that seniority is a key factor in increasing your credit score. In the next section, we'll tell you how to build your credit history from scratch.
Three Ways to Build Credit History in the United States
As an immigrant, it may seem difficult to apply for a loan, however small, without a credit history. But there are platforms that will help you take the first steps quickly, easily and safely.
1. Apply for an insured loan: Self
Self is a delivery loan that allows you to create a positive credit history with the three main credit bureaus or credit bureaus (Equifax, Experian and TransUnion, at the same time you save money. It doesn't require you to have a credit score to get started.
It allows you to automate payments so you don't have to keep an eye on your calendar and run the risk of forgetting the date. You can also view your credit score from their platform.
Not only will it help you to start your credit history and generate seniority, it will also help you improve your credit score if it has suffered a decline.
2. Report your frequent payments: Rental Kharma and Level Credit
Rental Kharma will help you convert your current rent payment history into credit history with TransUnion and Equifax agencies. It will allow you to increase your credit score quickly and generate seniority. In addition, you and your partner can register.
Level Credit connects to your bank's App, to convert your phone, water, gas, electricity and rent bills into credit history. With this you can increase your credit score in the main credit bureaus. You can add up to two years of credit history without needing to go into debt.
3. Apply for a secured credit card (Capital One, Discover it)
Secured credit cards require a prior deposit to offer you a loan if you have little credit history. The credit limit is usually low, but when used responsibly, they help you build a credit history that will allow you to later qualify for a larger loan.
Capital One offers you Platinum Secured Credit Card, with which you can build and repair your credit history. When you apply, you must deposit $49 USD and you will get $200 in credit. After 6 months of responsible use, your account will be reviewed to return your deposit and increase your credit line.
The card Discover It® it offers you loans without having a credit score; it also helps you build and repair your credit history. You can improve your credit services after seven months of responsible use.
Other tips
Try to diversify your methods of building credit history. Some platforms don't report to the three major credit bureaus or bureaus: Equifax, Experian and TransUnion. Therefore, choose two or three specific actions to ensure that you reach all important agencies.
Once you get your credit card, not only is it important to pay it on time, you must also use it frequently. Be well aware of the conditions for not exceeding the limits and to know if there is a minimum of use or amount that you must spend.
