Janice Lozano
International students studying in the United States may wonder whether they have a credit score. The answer is that it depends. International students can build a credit score in the US, but they won't have one when they arrive. Building a credit score is important for international students who want to take out credit cards or loans, rent an apartment, or buy a car. There are several ways for international students to build their credit scores, including getting a credit card, becoming an authorized user on someone else's credit card, or applying for a secured credit card or credit-builder loan.
| Characteristics | Values |
|---|---|
| Credit score for international students | International students do not have a U.S. credit score when they arrive in the country. |
| Importance of credit score | A credit score is important for taking out loans, getting a credit card, renting a home, or applying for a job. |
| Building a credit score | International students can build a credit score by using a credit card, becoming an authorized user on someone else's credit card, or getting a part-time job. |
| Credit bureaus | Experian, Equifax, and TransUnion are the three main credit bureaus that provide free annual credit reports. |
| FICO score | The FICO score, created by the Fair Isaac Corporation, is the most common credit rating system in the U.S. It requires at least six months of credit history. |
| VantageScore | VantageScore is another credit rating system that tends to be quicker than the FICO score. |
| Social Security Number (SSN) | An SSN is not required to have a credit history, but it makes it easier. International students with work authorization will be issued an SSN. |
| Individual Taxpayer Identification Number (ITIN) | An ITIN may be required to apply for a credit card or open a bank account, depending on visa status. |
| Bank accounts | Opening a bank account and setting up direct debits for bills can help build a positive credit history by showing timely payments. |
| Credit monitoring services | Engaging credit monitoring services can help create a profile of an individual's credit score and protect against identity theft and fraud. |
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What You'll Learn
International students and credit cards
As an international student, you won't have a U.S. credit score. However, it can be important to build credit while in the U.S. so that you can take out a loan, get a credit card, or rent an apartment or off-campus housing. Credit bureaus look at your credit history to arrive at your credit score. Factors include payment history, how much credit you use, and how many new accounts you've opened recently.
International students may be able to get a U.S. credit card, depending on their circumstances and the credit card issuer's policies. Credit card issuers typically review credit history when evaluating applications. If you don't have U.S. credit reports or have a thin credit file, it may be more difficult for issuers to assess your creditworthiness. Some issuers also require applicants to have a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN). If you don't have an SSN, you may be able to apply with an ITIN instead, or use your student visa to help you get one. You may also be able to get a credit card without an SSN or ITIN by becoming an authorized user on a trusted person's credit card.
Using a credit card responsibly is a simple way to build and maintain a good credit score. Credit cards are now used as widely as (if not more than) cash in the U.S., making it almost obligatory to own one. Not having a credit card can make it difficult, if not impossible, to do certain things like buying things online or renting a car. To build credit with a credit card, use it for daily purchases and pay off your charges each month or week. This will allow you to have regular use of the card and steady payments—both of which lenders like to see.
There are several credit cards available for international students, including:
- Capital One Savor Student Cash Rewards Credit Card
- Capital One Quicksilver Student Cash Rewards Credit Card
- Discover it® Student Cash Back
- Firstcard® Secured Credit Builder Card with Cashback
- Zolve Classic
- Zolve Signature
- Zolve Black
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Building credit history
International students typically do not have a US credit score when they first arrive in the country. However, building a credit history in the US is essential, as it can impact various aspects of life, such as renting an apartment, buying a car, or even securing employment. Here are some detailed and direct instructions for international students on building their credit history in the US:
Get a Credit Card
One of the easiest ways to build credit as an international student in the US is by obtaining a credit card and using it responsibly. Credit cards are widely used in the US, and having one can help establish your creditworthiness. Make sure to make timely payments on your credit card to demonstrate financial stability. Consider enrolling in automatic bill payments to avoid missing any due dates.
Build a Banking Relationship
While having a US bank account alone won't improve your credit score, it is an essential step in building your financial profile. Open a checking or savings account with a bank or credit union, and maintain a positive relationship with them. This can increase your chances of securing a credit card or loan with the same institution in the future.
Make Regular Utility Payments
If you're renting a property and paying utility bills (gas, electric, phone, internet, etc.), set up monthly transfers from your bank account to ensure timely payments. Making regular payments on your utilities demonstrates your ability to manage finances responsibly, which is appealing to lenders. Keep records of your utility payment history, as this can be accepted as supporting evidence of your payment behaviour when applying for loans or credit.
Pay Off Student Loans
If you have taken out a student loan, such as a Prodigy Finance loan, ensure that you make timely repayments. Prodigy Finance reports loan repayments to Experian in the US and TransUnion in the UK, which can help build your credit history.
Become an Authorized User
Another way to build credit is by becoming an authorized user on someone else's credit card, such as a sibling or relative who is already a responsible cardholder in the US. As an authorized user, you will get your own credit card, and your score will be tied to the primary cardholder's. However, remember that joint cards come with joint responsibility, so ensure clear communication about on-time payments.
Understand the Credit Scoring System
Familiarize yourself with the US credit scoring system, such as the FICO score created by the Fair Isaac Corporation, which is the most common credit rating system. Understand the factors that impact your score, such as payment history, credit utilization, and the number of new accounts opened. Additionally, check your credit score regularly using free tools like Credit Karma or NerdWallet.
Building credit as an international student in the US takes time and discipline. By following these steps and maintaining positive financial habits, you can establish a solid credit history that will benefit you during your time in the country and beyond.
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Credit scores and renting
As an international student, you won't have a U.S. credit score when you first arrive in the country. However, building a credit score is important if you're looking to rent an apartment.
Building a Credit Score as an International Student
International students can build a credit score in the U.S. by using a credit card responsibly. Credit cards are widely used in the U.S., and having one can make it easier to buy things online or rent a car. Using a credit card for daily purchases and paying off charges each month can help build a good credit score. Students can also become authorised users on a sibling's or friend's credit card, although this comes with the risk of joint responsibility.
Alternatively, international students can apply for a secured credit card, which requires a deposit that acts as collateral if payments can't be made. Students can also build credit by getting a part-time job or working on campus to demonstrate sufficient income to pay bills.
Credit scores are important when renting an apartment, as landlords may use tenant screening services to check credit scores and rental history. While there is no official minimum credit score required, a score above 670 is generally considered positive, and anything below may lead to further scrutiny of the applicant's finances.
Property management companies may be less flexible with low credit scores, but private landlords and homeowners may have more relaxed requirements. Renters with low credit scores can improve their chances of approval by getting a co-signer or guarantor, applying with a roommate, or paying a higher security deposit.
Renting can also help build credit if the landlord reports rent payments to credit agencies. On-time rent payments can positively impact a credit report, especially for those with limited credit history. However, missed rent payments can be sent to collections, negatively impacting credit health.
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Credit scores and employment
International students do not have a U.S. credit score when they first arrive in the country. However, it is important for them to build their credit score while they are studying in the U.S. if they want to take out loans, get a credit card, or rent an apartment. Credit scores are important for financial life in the U.S. and indicate to lenders how responsible an individual is with financial products.
Credit scores are sometimes used by employers to gain insight into a potential hire's financial history, especially if the role involves handling company finances or accessing private consumer data. Employers cannot access a candidate's credit score, but they can review a modified version of their credit report, which includes credit accounts, payment history, debts, bankruptcies, and certain work history. This is known as a soft inquiry and does not impact an individual's credit score.
Some people view this practice as controversial, arguing that it harms those who are building their credit or recovering from financial difficulties. However, employers use this information to assess an applicant's financial behaviours, and it is usually the last step before making a job offer. It is also more likely to be performed for candidates applying for positions that require the handling of money, such as accountants or retail clerks.
While a credit report is one of many factors employers consider when hiring, bad credit can be a reason for rejection in some U.S. states, particularly for financially sensitive jobs. Therefore, it is advisable for international students to start building their credit score while in the U.S. if they plan to enter the job market. This can be done through responsible credit card usage, becoming an authorized user on someone else's card, or applying for credit cards specifically designed for international students.
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Credit scores and loans
Credit scores are an important aspect of financial life, especially in the United States. They are a prediction of how likely an individual is to repay a loan on time, based on their credit reports. Credit scores are calculated by credit bureaus, with the three main ones being Experian, Equifax, and TransUnion. These bureaus consider various factors, including payment history, credit utilisation, length of credit history, and credit mix.
For international students in the US, building a credit score can be challenging but highly beneficial. While they do not start with a US credit score, there are several ways to establish and improve their creditworthiness. One effective method is to obtain a credit card and use it responsibly. Credit cards are widely used in the US, and by making regular purchases and timely payments, international students can demonstrate their financial responsibility. Additionally, becoming an authorised user on someone else's credit card can help build credit, though it carries the risk of shared responsibility for any negative or positive impact on the credit score.
Another strategy for international students to build credit is to focus on their credit mix. This involves managing both installment accounts, such as personal loans or mortgages, and revolving accounts, including credit cards. Demonstrating the ability to handle different types of credit responsibly can enhance an individual's credit score. It is also beneficial to enrol in services that include rent and utility payment information, as a good track record in these areas can positively influence the credit score.
While building credit, it is essential to understand that multiple credit scores exist. The most common measurement in the US is the FICO score, created by the Fair Isaac Corporation. However, different lenders may use other scoring models, such as VantageScore. These scores typically require a credit history of at least six months before they are generated. International students should also be aware that simply having a US bank account will not directly impact their credit score, but it can help them manage their finances more effectively and make timely payments, which are crucial for a good credit score.
In summary, credit scores play a significant role in an individual's financial life, and building a positive credit profile is advantageous for international students in the US. By utilising credit cards responsibly, focusing on their credit mix, enrolling in services that include rent and utility payments, and understanding the various scoring models, international students can actively work towards establishing and improving their creditworthiness.
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Frequently asked questions
No, international students do not have a US credit score when they arrive in the country.
A credit score is important for your financial life in the US. Without a credit history in the US, you may find it difficult to rent an apartment, buy a car, or even get a job.
One of the easiest ways to build credit in the US is with a credit card. Using a credit card responsibly is a simple way to build and maintain a good credit score. You can also build your credit score by setting up direct debits for your monthly bills, paying utility bills and phone bills on time, and opening a checking and savings account, regularly transferring money into it.
A credit score is a three-digit number that gives lenders an indication of how responsible you are with financial products, specifically loans. The higher your score, the more responsible you are in the eyes of lenders.
The FICO score is the most common measurement used to identify your credit rating inside the US. It is used to predict how reliable you will be in paying back borrowed funds.
