Douglas Olsen
International students in the US face challenges when it comes to building their credit score from scratch, as credit scoring and history are bound to geography. While international students can get credit cards, it can be difficult to find a company that will issue one without a Social Security Number (SSN) or credit history. However, some credit card companies will accept an Individual Taxpayer Identification Number (ITIN) or even a visa, and international students may be able to apply for an ITIN online through the IRS depending on their visa status.
| Characteristics | Values |
|---|---|
| Difficulty in getting a credit card | Yes |
| Need for a credit card | Yes |
| Ways to get a credit card | Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN), or a co-signer |
| Importance of credit score | High |
| Impact of bank accounts on credit score | None |
| Impact of credit score on loans, insurance, and housing | High |
| Ways to build credit score | Credit cards, part-time jobs, bank accounts, rent payments, utility bills, student loans |
| Credit bureaus offering free annual reports | Experian, Equifax, TransUnion |
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What You'll Learn
International students' eligibility for a Social Security Number (SSN)
International students can obtain a Social Security Number (SSN) in the US, but eligibility is dependent on their ability to prove their eligibility to work in the country. SSNs are issued by the US Social Security Administration (SSA) and are a requirement for tax and employment reporting purposes.
International students in F-1 or J-1 status are eligible for an SSN, but they must first obtain valid employment authorization. For on-campus employment, students must obtain a letter from their college department confirming that they have been offered an on-campus job. They must also meet SSA eligibility requirements, including providing valid immigration documents, such as a passport, I-20 or DS-2019, and an I-94 card.
J-1 students must show evidence of employment and be in valid J-1 status, registered for a full course of study, and sponsored by an external organisation. F-1 students must also provide evidence of lawful F-1 employment, such as an on-campus job or authorization for curricular practical training (CPT) or optional practical training (OPT).
International students should be aware that an SSN is not required to obtain a driver's license, cell phone, credit card, insurance, or admission to an academic institution. However, it is a requirement for tax purposes and to open certain bank accounts. Obtaining an SSN can be an important step for international students to build a financial profile and establish credit in the US.
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Getting a credit card as an international student
International students can get a credit card in the US, but it may be difficult, and the options are limited. The best way to start building a financial profile is by speaking with the international student affairs office at the educational institution. They can inform students about their eligibility to get an on- or off-campus job, which determines their eligibility to apply for a Social Security Number (SSN).
If an individual is not eligible for an SSN, they can apply for an Individual Taxpayer Identification Number (ITIN). Approval for an SSN can take up to four weeks, and an ITIN can take seven weeks. Some credit card issuers let applicants use an ITIN instead of an SSN on card applications. However, as the Internal Revenue Service (IRS) website notes, you'll need a "valid tax reason" for needing an ITIN, such as filing a U.S. federal tax return or being a dependent or spouse of a U.S. citizen.
Another option is to become an authorized user on someone else's account. A cardholder can add an eligible user with an SSN or ITIN to their credit account as an authorized user, without relying on the authorized user's credit score. This can be a good option for students who don't plan to stay in the US long-term.
Some credit card issuers provide cards exclusively for international students that will only require a passport to submit an application. Student credit cards are designed specifically for young college students who are most likely applying for their first credit card. Most student cards have benefits such as no annual fees and some cash-back rewards.
American Express partners with the third-party service provider Nova Credit to check credit scores from a handful of other countries to better evaluate applications from those who may only have credit history outside the US. You'll still need an SSN or ITIN to apply for an Amex card, but if you have credit from another country, you can use it to qualify for a better card.
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Building a credit score as an international student
International students often do not have a credit score in the US as they may have limited or no financial information in the country. However, building a credit score is important if you plan to stay in the country long-term. A good credit score can help you secure a loan, get a credit card, rent an apartment, or even buy a car.
The first step in building a credit score as an international student is to get a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN). To get an SSN, you need to be eligible to work in the US, even if it's temporary. You can apply for an ITIN if you don't qualify for an SSN.
Once you have an SSN or ITIN, you can apply for a credit card. Not all financial institutions will issue credit cards to international students, and your options may be limited. Some credit card companies may require you to have a credit history in the US, while others may accept your credit score from your home country. American Express, for example, partners with Nova Credit to check credit scores from a few other countries. You can also look for credit cards specifically for international students that only require your passport information.
Using a credit card responsibly is one of the easiest and simplest ways to build and maintain a good credit score. Make sure to use your credit card for daily purchases and pay off your charges each month or week. This will show regular use of the card and steady payments, which lenders like to see. Setting up automatic payments for at least the minimum due each month can help ensure you never miss a payment.
In addition to getting a credit card, there are other ways to build your credit score:
- Open a checking account at a US bank. While having a bank account alone won't improve your credit score, it will help you manage your finances effectively and make payments on time. Just be sure to understand all potential bank fees and penalties, as unpaid bank fees will negatively impact your credit score.
- Sign a lease with a roommate who has good credit. Some landlords may not require a credit check or may accept tenants with no credit history if they have roommates with good credit. If the landlord reports rent activity to a credit bureau, this can help build your credit score.
- Put utility bills in your name. If the utility company reports payments to credit bureaus, this can help establish a responsible financial history.
- Report your rent to Experian's RentBureau. In the US, rent is not automatically reported on your credit report, but Experian now accepts rent reports, which can help your off-campus housing costs count towards your credit score.
- Take out a loan. International student loans can help build your credit history while also providing funds for your studies.
Remember, building credit takes time, and the length of your credit history is a primary factor in achieving a higher credit score. Start building your credit profile as soon as possible during your time as an international student in the US.
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The importance of a credit score for international students
International students in the US often do not have a credit score when they first arrive in the country, as they may have limited or no financial information to review in the US. However, building a good credit score is important for international students who plan on staying in the US long-term. Credit scores are used by lenders to assess an individual's financial background and determine whether they are eligible to borrow money. A good credit score indicates that you are more likely to pay back loans on time and can give you access to various benefits.
One of the easiest ways to build credit as an international student in the US is by getting a credit card and using it responsibly. Credit cards are now used as widely as, if not more than, cash in the US, and they can be essential for those who plan to stay in the country long-term. However, it can be difficult to find a company that will issue a credit card to international students, especially if they do not have a Social Security Number (SSN) or credit history. Some options for international students include applying for a secured credit card or credit builder loan, or finding a US citizen or permanent resident who will act as a cosigner.
Another way to build credit is by taking out loans and financing different purchases. This can include student loans, mortgages, personal loans, or car financing. Credit scores are also important when trying to rent an apartment or buy a house, as landlords and apartment complexes may complete a credit check on potential tenants to ensure they will make their payments on time. Additionally, utility companies may look at your credit score to determine whether you will need to pay a deposit for their services.
International students can also build credit by opening a US bank account and making regular payments on time. While having a bank account will not directly improve your credit score, it can help you manage your finances effectively and make timely payments, which is an important factor in building credit.
Overall, building a good credit score is important for international students in the US as it can provide access to various financial opportunities and benefits, such as loans, credit cards, and housing. By using credit cards and loans responsibly, making timely payments, and maintaining a strong credit history, international students can improve their credit scores and reap the benefits of a higher score.
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Alternative ways to build a financial profile
International students often face challenges when trying to build a financial profile in a new country. While getting a credit card is one of the most common ways to build credit, it can be difficult for international students to obtain one, especially without a Social Security Number (SSN) or credit history. However, there are alternative ways for international students to build a financial profile:
Open a Checking Account at a U.S. Bank
Opening a checking account at a U.S. bank is a good first step. While this won't directly improve your credit score, it demonstrates to credit card companies that you have monetary assets in the country. It can also make it easier to apply for a credit card with the same bank later on.
Sign a Lease With a Roommate
When renting an apartment, consider signing a lease with a roommate who has a good credit history. Some landlords may be willing to accept tenants with no credit history if they have roommates who can vouch for their financial responsibility. Additionally, if the landlord reports rent activity to a credit bureau, this can help establish your financial profile.
Put Utility Bills in Your Name
If the utility company reports payments to credit bureaus, putting utility bills in your name can help build a positive financial history. Ensure that the account is in your name so that your timely payments are documented.
Take Out a Personal Loan
Consider taking out a small personal loan from a credit union or online lender and making timely repayments. Credit unions are often more flexible than banks and can offer lower fees. Building a relationship with a credit union can benefit you when seeking future loans.
Use Alternative Credit-Building Apps
There are apps like Experian Boost and Pay Your Rent that can help build your credit. Experian Boost allows you to choose which payments, such as rent and utilities, to report to Experian. Pay Your Rent enables you to pay rent directly through the app, and some landlords may agree to use this service.
By utilising these alternative methods, international students can begin to establish a financial profile and work towards achieving their financial goals in their new country.
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Frequently asked questions
International students can get a credit check, but they won't have a US credit score when they arrive in the country. International students can build a credit score in the US, which will make it easier for them to rent an apartment, buy a car, or even get a job.
International students can build a credit score in the US by getting a credit card and using it responsibly. They can also open a US bank account, take out a loan, or put utility bills in their name.
A credit score is a rating given to your financial background when assessed by a lender. The higher your score, the more financially responsible you are considered to be.
Getting a credit card as an international student can be difficult, but there are a few options. International students may need an SSN or ITIN to apply for a credit card. They can also apply for a secured credit card or become an authorized user on someone else's card.
