Author Topic: Immigrating to MA, USA from London, UK - advice on credit scores, dos & don'ts?  (Read 5250 times)

simondh

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Hi all, new to posting on MMM but have been reading for a while. My wife and I are moving to the US (Western Mass) from London, UK. I'm early 30s, she's late 20s. I will be working and she won't because of our visa set up. We've also lived in South Africa and Italy.

We hope to buy a house in the next couple of years, but plan to rent first while we build up our credit scores to get a better mortgage deal and to build up the capital for our down payment.

But, as a consequence of not having lived in the US, neither of us has a credit score. Any advice on building that up, or suggestions of sites to refer to would be useful (I've already seen creditkarma.com suggested and will use it once we're settled). I have the cash to buy a 2nd-hand car, but plan to get a loan to start building our credit score. Also, as far as I understand, I will not be able to get a normal credit card, but will be able to get a secured credit card. I'm totally happy with this.

A friend of mine who moved to the US a couple of years ago suggested getting a bunch of store cards, buying small things and paying them off quickly. I'm not sure how wise that is, or whether it is actually worthwhile. Any advice appreciated.

Also, in considering the above information note the following. Though I've recently finished a PhD (and my wife also recently finished studying, with intermittent work), we have no student debt, no credit card debt, and some savings (hence being able to buy a car for cash). Anyway, feel free to unleash badass advice.

matchewed

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I personally wouldn't get a car loan for the purpose of building credit. Just get a credit card that will cover your normal expenses like groceries, bills, and gas (petrol). Then pay it off each month. That plus demonstrable income and you will have a fine credit score.

icefr

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Try to find a credit union. Many banks will charge you for a secured credit card, but most credit unions won't. If there's a credit union associated with your employer, they might even have a program to help you build credit in the US and give you an unsecured credit card. Don't use more than 20% of the limit at any time.

Rebecca Stapler

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I don't think you should get a car loan for the sake of building credit, because there are free or lower-cost ways to do that.

If you won't qualify for a regular credit card, find a secured credit card from a bank that holds your money as security against the balance of the cc. I agree that store cards might help too -- they aren't necessarily credit cards either, so they are more lax about credit worthiness, and usually have low limits.

With any card you get, pay it off in full and on time each month.

When you have built some credit with these methods, get a regular credit card as soon as you can, and keep it open; use it and pay it off each month; and close all the extraneous cards. Mortgage lenders don't like to see that you have access to a lot of credit. They also like to see that you have had a card open for a long time.

Paul der Krake

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I was in the exact same position as you a few months ago, also moving from London. 0 credit history, super high insurance premiums, pure joy. It's your lucky day, I've spent hours looking at card offers with 0 credit and how to get started as a foreigner.

Cutting to the chase. You want to get this, it's free and they will give it to virtually anybody:
http://www.capitalone.com/credit-cards/cash-rewards-for-newcomers/

Additionally, the cheapest secured card I could find was with Wells Fargo, $25 annual fee.
https://www.wellsfargo.com/credit-cards/secured/

Will you be moving as part of the 2013 H1B crop it October? I've actually started writing a guide to explain how to get things done when immigrating to the US (SSNs, driving license, bank accounts, among other things), and I'm hoping to have it ready by then to help out the newcomers.

spider1204

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I can't offer much advice about the credit card situation, but I'm curious about what has you moving to western MA?  I grew up and went to school there, kinda missing it a little bit.  What's the new job, what city are ya gonna live in?  Also, feel free to ask me anything you might wanna know about the area.

FrugalZony

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Do you by any chance have an American Express card to your name already?
Can you get one easily before your move (when are you planning to move?).

I would advise against any loan just to build credit
Also any store cards will most likely be denied for lack of credit.

There are really only two options to build credit for new transplants:
1) the above mentioned secured credit card (only use to about half of your limit and always pay off in full)
2) transfer a previously owned foreign AMEX (you have to have it in Europe for a while before you transfer)
http://www.americanexpress.com/global-card-transfers/

In both cases it will take time to build credit. I know it's silly that you are kind of forced to
borrow money to proof that you are creditworthy, but that's the way the system works over here.



ivyhedge

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Do you by any chance have an American Express card to your name already?
Can you get one easily before your move (when are you planning to move?).

I would advise against any loan just to build credit
Also any store cards will most likely be denied for lack of credit.

There are really only two options to build credit for new transplants:
1) the above mentioned secured credit card (only use to about half of your limit and always pay off in full)
2) transfer a previously owned foreign AMEX (you have to have it in Europe for a while before you transfer)
http://www.americanexpress.com/global-card-transfers/

In both cases it will take time to build credit. I know it's silly that you are kind of forced to
borrow money to proof that you are creditworthy, but that's the way the system works over here.


If your heart is set on building credit using revolving means (as others have cautioned against so doing), at least make sure the card is particularly useful: Sears if you need appliances, Costco/Amex if you enjoy that shopping experience, etc.


Credit unions are oft a good first stop. But I know there are some unions to which I've sent acquaintances who were definitely turned down on account of too short a credit history. Plus, your location might naturally limit the number/robustness of options.

FrugalZony

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Oh and another suggestion, try to get letters from your current phone, utility, insurance companies etc. about
how long you have been with them and your account history.
It's a bit of a time investment, but it MAY save you from having to plunk down deposits everywhere due to
lack of credit history.

I had those from all my utilities, my bank, car insurance etc. and all that was helpful.
No deposit needed for phone company and electricity. Landlord accepted a normal deposit (not months and months, like
some friends had to put down, because of lack of credit history).
Found a car insurance broker that was able to help us get a decent rate and then later optimised once we had history.
Even when we got our loan (we had a large downpayment), our lender actually reviewed information from my bank
and did call my bank to verify.

This may or may not help you on the East Coast, I don't know. For me it was well worth the time investment in all the hustle
and bustle of the move.

Good luck!