Author Topic: New in the US of A ... need advice - banking and credit score  (Read 7363 times)

MrSal

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New in the US of A ... need advice - banking and credit score
« on: January 19, 2015, 11:10:07 AM »
Hello fellow mustachians and spartans*

I am seeking your advice! I am a new resident in the US of A, where I came to the country about 3 months ago. For this past 3 months I was unable to work or even open a bank account due to the fact that I didn't have a SSN. Well low and behold, that after 3 months !! (talk about bureaucracy) I finally have my SSN.

Now I'm in need of advice.

First: Which banking account do you recommend? I come from Portugal where the banking system is really advanced and from what I've seen here in the US, the banking seems to be subpar. Nonetheless, the ones I've looked that seem good and offer many services for free are CapitalOne and Capital360. Now here comes the confusion... aren't these two the same supposely? And if not, what differs between these two?

Any other banking services you recommend? I'd like a banking where I pay NO maintenance fees, nor other fees for withdrawing money etc and that its' online platform is sound and robust (I hate having to go to an agency), where you can use all their services at the click of a button.

Past the banking thing ... being a new resident with no history... I assume I have no credit history whatsoever! Nor credit history/score is something that exists in my country so this is new to me...

 So my question is.... how do I build one? What should I do to have a good score? Any tips/methods? My "sheet" is a blank canvas as of now...

Thank you in advance

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Re: New in the US of A ... need advice - banking and credit score
« Reply #1 on: January 19, 2015, 11:25:01 AM »
welcome MrSal to the USA and (recently) to these forums.
I'm wondering how you consider the banking system to be 'subpar' compared to Portugal.  I'm not saying it isn't - I am just wondering what you see here that you think should be improved.

For starters, establishing a credit history starts with getting credit of some sort.  For most people that will be a credit card (CC) but that could also be a mortgage or a car loan (ew!).  If you don't have a mortgage or a car loan then the simplest method will be to get a credit card.  There are hundreds (if not thousands) of CCs to choose from, but I'd look for one that has no annual fee.  So long as you can pay off your balance every month (a mustachian thing to do) I wouldn't worry about what how high the APR is. 
The problem is that you might get rejected from many credit cards because you have no credit-card history.  It's kind of a chicken-and-egg thing... you need a card to establish credit history, but you sometimes can't get a cc because you have no credit history. 
The easiest way around this IMO is to talk to your bank and see if they have a no-fee cc they can offer you.  Once you have had that for a year or two (and are in good standing) it will be much easier to apply for another card - perhaps one that comes with rewards or frequent flier miles. 

As for banks, I have TD Bank and have found them to be very helpful with very good hours.  I had (past tense) Bank of America and found them to be very difficult to deal with and constantly trying to apply fees to everything.   IMO whatever bank you have in your town will probably work out fine as long as you know what the terms are (e.g. how much you need to keep in your account/month to avoid a fee).

ShoulderThingThatGoesUp

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Re: New in the US of A ... need advice - banking and credit score
« Reply #2 on: January 19, 2015, 11:33:07 AM »
Most banks will offer you a free account if you keep more than some amount in it, anywhere from $100 to $3000. Capital One 360 is owned by the same company as Capital One but is a different bank (360 used to be owned by ING until it sold its American division). Capital One 360 has no physical locations where you can go do deposit money - everything is online. So, I like to have another bank account, where I keep just a little over the balance to not pay any fees on the account, that has a physical office within walking distance of my house. For this reason I have $3000 in a checking account with Wells Fargo, but I pay the electricity bill from Capital One 360.

For your own convenience, you should get your paycheck direct deposited into one of your bank accounts. Your employer should provide you a form to fill out to do that.

Once you have a bank account, you should be able to get a credit card. Again, you should keep looking until you find one that you don't pay a fee simply to have. Whatever bank you choose may offer you one. You get a high credit score by paying your debts - including by having a credit card that you pay the full balance on every month. If you don't pay the full amount, you'll be charged interest. Doing silly things like not paying bills on time will hurt your credit score, but you're posting on this forum so I doubt you're likely to do that.

I apologize if this is stuff you already know - I wrote what I'd tell a Martian.

Distshore

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Re: New in the US of A ... need advice - banking and credit score
« Reply #3 on: January 19, 2015, 11:42:39 AM »
When I arrived in the US I opened a no-fee checking and savings account with Capital One (then North Fork bank).  Their online platform is ok, though I would agree overall that US banking is much less flexible and modern than what I'm used to in my home country.

/rant For example - you still run checking accounts!  Write checks!  Limited availability of chip and pin systems!  No/few easy/free ways to pay all bills online and transfer money to friends/family/landlords electronically.  I'll stop there before I get really rude ;) /end rant

Back on point...as Capital One now owns ING America (called CapitalOne360 now) - you can also open their online savings and brokerage accounts and have that all accessible on the one platform.  So you can access the higher interest savings account and discount brokerage through the one platform.  This may also be possible with other banks, but I've no experience with them.

After a couple of months of having the checking/savings accounts with them, they offered me a no fee credit card with a limit of $300.  I used that to start building my credit history.  They increased the limit in a few months to $1000, and then I started getting better offers from other banks.  Go from there.  Don't apply to open store cards at first as you'll end up with a lot of rejections on your credit history; also the rewards are not worth it unless you're a shopper, which I presume you're not due to your presence on this forum!

Best of luck.

epipenguin

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Re: New in the US of A ... need advice - banking and credit score
« Reply #4 on: January 19, 2015, 11:43:45 AM »
I use Capital One 360 and like it. If you open an account with them, you can always call Capital One and ask what the available cc opportunities are for you.

When I moved to the US, I opened an Amex charge card in my home country first, and then moved the account to the US when I got here. That way I was able to take advantage of my old credit history. I'm not sure if that's even possible any more, though. I have read about secured credit cards to build a credit history up. You deposit a certain amount with the bank, say $300, and that's your credit limit on the card. Use the cc to build up some charges every month, and pay it off every month. That way, your payments start getting reported to the credit scoring agencies.

MrSal

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Re: New in the US of A ... need advice - banking and credit score
« Reply #5 on: January 19, 2015, 01:12:13 PM »
welcome MrSal to the USA and (recently) to these forums.
I'm wondering how you consider the banking system to be 'subpar' compared to Portugal.  I'm not saying it isn't - I am just wondering what you see here that you think should be improved.

For starters, establishing a credit history starts with getting credit of some sort.  For most people that will be a credit card (CC) but that could also be a mortgage or a car loan (ew!).  If you don't have a mortgage or a car loan then the simplest method will be to get a credit card.  There are hundreds (if not thousands) of CCs to choose from, but I'd look for one that has no annual fee.  So long as you can pay off your balance every month (a mustachian thing to do) I wouldn't worry about what how high the APR is. 
The problem is that you might get rejected from many credit cards because you have no credit-card history.  It's kind of a chicken-and-egg thing... you need a card to establish credit history, but you sometimes can't get a cc because you have no credit history. 
The easiest way around this IMO is to talk to your bank and see if they have a no-fee cc they can offer you.  Once you have had that for a year or two (and are in good standing) it will be much easier to apply for another card - perhaps one that comes with rewards or frequent flier miles. 

As for banks, I have TD Bank and have found them to be very helpful with very good hours.  I had (past tense) Bank of America and found them to be very difficult to deal with and constantly trying to apply fees to everything.   IMO whatever bank you have in your town will probably work out fine as long as you know what the terms are (e.g. how much you need to keep in your account/month to avoid a fee).

Thanks for your reply.

Yes that was my worry. Because companies ask for credit history to get a CC but I have none ... but yet, in order to start a history you need a CC. Just like you said... chicken and the egg.

Well... My/Our house (both my wife's and mine) the mortgage is only under her name. Maybe I could ask the name to put the mortgage on my name as well? Is that possible to do without being a "new" contract and hence being as if paying closing fees and such again?

As for the banking system, checks here are commonly used. In my country I never used a check in my life! There are almost no fees whatsoever for making transfers between banks. There is a central system ran by the central bank and you can do everything from the ATM such as pay all utility bills, pay for ticket shows, pay your taxes ... transfer funds... charge your cellphone with money ... etc etc...

There is also a system provided by all the banks, which your CC number never gets out to the internet. Instead you assign a $$ amount/limit and the bank creates a virtual CC number that is only good for that dollar amount. And we've had this for 20 years already these type of services.

Everything can be done through the ATM instead of multiple portals. Even when you use an online store or purchase tickets you can have the option to pay with CC on a certain merchant website or instead pay by reference and code entity thru the ATM.

As for CC's ... of course I pay everything in full I only use CC's for the benefits and don't ever carry debt.

I believe the only CC i ever carried debt is a portuguese one that gives 5% cash back monthly but only if my max payment is 50% so that's why I do it, which in essence translates to around a 3.4% cashback but since i make money out of it I'm cool with that - (I make about 5000 dollars a year risk free with this card... a net return RISK FREE of 50-70% a year ... simply because I use the CC to buy... Treasury Bills of my country :D )

MrSal

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Re: New in the US of A ... need advice - banking and credit score
« Reply #6 on: January 19, 2015, 01:16:48 PM »
If you are new to the US, Capital One 360 will deny you a chequing account. Their current policies require you to have a nontrivial credit history before you can open an account. So if you apply, it will cost you a hard pull and you won't even get a chequing account.

Additionally, Capital One does not normally grant credit to people with no credit history, even if you show substantial assets or income.

Bank of America will probably be among the easiest to get a normal, non-secured card from with no history, because they will actually review evidence you provide and consider your arguments, whereas most of the banks just apply rigid formulas.

Furthermore, opening a bank account does not require a SSN, so any bank that told you that was mistaken. Form W-9 is clear that you do not need to fill in the SSN if you have applied for one and are waiting to receive one.

You do not require an SSN to work either. Any employer that told you that was mistaken. The SSN field on Form I-9 is completely optional; even if you have one, you do not need to provide it. If the employer uses e-verify, then the SSN is slightly less optional because if you have an SSN, you must provide it; but if you don't have one, it's an optional field and can be omitted. Whether you are authorised to work in the USA is a completely separate question from whether you have an SSN.

I actually both worked and had bank accounts in the USA before I received my SSN. It's not an issue if you deal with people with know the rules. Three months does sound excessive to receive an SSN though. I received mine within a week of applying.

yeah supposely the SS office had problems matching my name with Homeland Security... (I have a big name...even my green card doesn't show my full name), so they had to do everything manually).

Regarding the credit history capital one then you say I will be rejected?

Is being rejected a bad thing for your credit score? That is somehing i still don't understand... does a query from an entity to pull up my report hurt my credit? If it does, then it should be my goal that my report is pulled as less as possible?

Spondulix

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Re: New in the US of A ... need advice - banking and credit score
« Reply #7 on: January 19, 2015, 01:25:11 PM »
Adding you to the mortgage title could cost $500, and it still would take time to build a credit history (not worth the cost, IMO).

I would shop around for a bank that will issue you a debit card (with your checking account) and a credit card. Run your debit transactions as "credit" (not as ATM with a pin code - which in the US is actually less secure than credit). I'm not taking about an ATM machine, but places like the grocery store where they give you multiple options of how to run a transaction.

It may seem counterintuitive, but use those cards often. At this point, it's really about building a credit history. If you're paying off every month, interest rates really don't matter (and it'll probably be high for someone with no credit history, anyhow.)

Edit: one more piece of advice - go into your local branches and ask if they will give you an account before they run your credit. Don't apply online.

Paul der Krake

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Re: New in the US of A ... need advice - banking and credit score
« Reply #8 on: January 19, 2015, 01:28:24 PM »
Is your spouse a US person? If so, the fastest way for you to get credit history is to have you added to one card.

ShoulderThingThatGoesUp

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Re: New in the US of A ... need advice - banking and credit score
« Reply #9 on: January 19, 2015, 01:53:33 PM »
yeah supposely the SS office had problems matching my name with Homeland Security... (I have a big name...even my green card doesn't show my full name), so they had to do everything manually).

I had that problem too, but just with an employer using eVerify. I have three middle names. I had to bring my driver's license, my social security card, my passport, and my Selective Service card before the Homeland Security system was convinced that I was one person. So it happens to people born in the US too.

Can your wife see if you can be added to some of her accounts?

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Re: New in the US of A ... need advice - banking and credit score
« Reply #10 on: January 19, 2015, 02:20:45 PM »
Many years ago when I had a miserable credit history I went out and obtained a secured credit card from a money center bank.  I used that card for a year or so and then started receiving unsecured credit card offers.  This is probably the fastest way to get a major credit card with a decent limit.

Some possible secured cards:
Wells Fargo - https://www.wellsfargo.com/credit-cards/secured/
Bank of America - https://www.bankofamerica.com/credit-cards/products/secured-credit-card.go
US Bank - https://www.usbank.com/credit-cards/secured-card.html
Fifth Third - https://www.53.com/personal-banking/credit-cards/secured-mastercard.html

MrSal

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Re: New in the US of A ... need advice - banking and credit score
« Reply #11 on: January 19, 2015, 02:24:09 PM »
Is your spouse a US person? If so, the fastest way for you to get credit history is to have you added to one card.

yes she's born and raised US Citizen ...

MrSal

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Re: New in the US of A ... need advice - banking and credit score
« Reply #12 on: January 19, 2015, 02:26:47 PM »
yeah supposely the SS office had problems matching my name with Homeland Security... (I have a big name...even my green card doesn't show my full name), so they had to do everything manually).

I had that problem too, but just with an employer using eVerify. I have three middle names. I had to bring my driver's license, my social security card, my passport, and my Selective Service card before the Homeland Security system was convinced that I was one person. So it happens to people born in the US too.

Can your wife see if you can be added to some of her accounts?

should she add me to her credit card account or to her banking accounts like checking/savings? so in essence in would be a joint account?

also, the secured card option ... i'm sorry but i have no idea what a secured card is ... i guess i'll have to read more about it then!

EDIT: okay... i see it is a kind of pre-paid CC where you put some collateral first.

Just one question... in order to apply to these cards do I have to have a checking account with those banks?
« Last Edit: January 19, 2015, 02:29:02 PM by MrSal »

SaintM

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Re: New in the US of A ... need advice - banking and credit score
« Reply #13 on: January 19, 2015, 02:45:13 PM »
If your wife adds you to her credit card account, you become an "authorized user." She remains solely legally responsible for repayment of the account. But, the account will appear on your credit report. If you later remove your name from the account, you will no longer be an authorized user and the account will appear as "terminated" on your credit report.

Dimitri

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Re: New in the US of A ... need advice - banking and credit score
« Reply #14 on: January 19, 2015, 02:51:38 PM »
Quote

also, the secured card option ... i'm sorry but i have no idea what a secured card is ... i guess i'll have to read more about it then!

EDIT: okay... i see it is a kind of pre-paid CC where you put some collateral first.

Just one question... in order to apply to these cards do I have to have a checking account with those banks?

Essentially you put $x on deposit and the bank gives you a credit card with the exact same limit.  Want a credit card with a $1K limit?  Put up $1K.  Want $10K?  Put up $10K.  You set your own limit.  The bank essentially takes no risk as if you default they already have the funds. 

With respect to checking account with the banks - I haven't looked into the details of these particular secured credit cards but I would believe not. 

What is nice about this method is you are getting a credit card from a money center bank.  You know it is secured.  Nobody else does.  That includes the credit reporting agencies. 

Dodge

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Re: New in the US of A ... need advice - banking and credit score
« Reply #15 on: January 19, 2015, 08:21:58 PM »
Some merchants prefer checks, to avoid the 2% or whatever fee they have to pay to the credit card merchant.  Hard to blame them.

For banks, we have been with Ally Bank for a while now, and are very happy.  Two things in particular keep me happy:

1.  Their fee page.  There's barely anything listed here!  Most banks this is a multi-page PDF:

http://www.ally.com/bank/interest-checking-account/

2.  The savings account interest rate, currently 0.99%

http://www.ally.com/bank/online-savings-account/

There are some online savings accounts which are a bit higher than 0.99%, but they aren't banks.  I like having my checking account in the same place as my savings account.

As for your credit card, credit score question, get yourself on your wife's cards.  Very easy to quickly get your credit score built up.

MrSal

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Re: New in the US of A ... need advice - banking and credit score
« Reply #16 on: January 19, 2015, 09:31:13 PM »
If your wife adds you to her credit card account, you become an "authorized user." She remains solely legally responsible for repayment of the account. But, the account will appear on your credit report. If you later remove your name from the account, you will no longer be an authorized user and the account will appear as "terminated" on your credit report.

Great!

I'll do that and also sign up for a secured CC ... it should build my report fast!

MrSal

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Re: New in the US of A ... need advice - banking and credit score
« Reply #17 on: January 30, 2015, 08:14:54 PM »
Ok to update...

I opened a normal checking account in one of the local banks...

I also added myself as an authorized user to my wife-s credit card and we will start using it to pay bills, utilities and such so i can build up my score.

Ill try also the secured credit card offered by BofA for example, even though, the guy at the bank said that without income as of now (because im not yet employed) secured CC's are also a far bet... not sure if he was right or not..we'll see! Lets hope it works!!

MrSal

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Re: New in the US of A ... need advice - banking and credit score
« Reply #18 on: February 25, 2015, 10:14:50 PM »
Got a new CC approved just myself!

I went ahead and tried Discover Card. They approved me off the bat!

I also tried to open a Capital 360 account and just went for a Savings account which has no credit report pulled. The guy on the phone said that people that are already clients once they sign up for a checking they dont get a credit report pulled either... so i went for savings and then later ill open a checking as well.

nereo

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Re: New in the US of A ... need advice - banking and credit score
« Reply #19 on: February 26, 2015, 06:59:38 AM »
Got a new CC approved just myself!

I went ahead and tried Discover Card. They approved me off the bat!

I also tried to open a Capital 360 account and just went for a Savings account which has no credit report pulled. The guy on the phone said that people that are already clients once they sign up for a checking they dont get a credit report pulled either... so i went for savings and then later ill open a checking as well.
sounds like you're off on the right track.  One thing I'd caution you against is trying to open too many lines of credit too quickly.  That can negatively affect your score.
Instead, wait a few months before opening a Capital 360.  After that, I don't really see a reason to open more cards - just concentrate on the two you have and work on slowly increasing their limits and paying them off in full every month.

RexualChocolate

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Re: New in the US of A ... need advice - banking and credit score
« Reply #20 on: February 26, 2015, 09:13:51 AM »
Got a new CC approved just myself!

I went ahead and tried Discover Card. They approved me off the bat!

I also tried to open a Capital 360 account and just went for a Savings account which has no credit report pulled. The guy on the phone said that people that are already clients once they sign up for a checking they dont get a credit report pulled either... so i went for savings and then later ill open a checking as well.
sounds like you're off on the right track.  One thing I'd caution you against is trying to open too many lines of credit too quickly.  That can negatively affect your score.
Instead, wait a few months before opening a Capital 360.  After that, I don't really see a reason to open more cards - just concentrate on the two you have and work on slowly increasing their limits and paying them off in full every month.

Speed in which he opens the accounts doesn't matter (unless it trips some anti fraud measures) as any hard inquiry stays on a report for 2 years, so waiting a couple of months wouldn't add any value.

To OP, you should do your research before commenting on the quality of banking systems. I get you just meant from a consumer perspective, but Portugal's banking system is a fairly large disaster, right behind Greece and Italy. Its largest lender just failed a few months ago and had to be propped up by the ECB. Banks here are primarily profit driven instead of politically, so unprofitable deposits don't get a bunch of free services at the expense of others.


MrSal

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Re: New in the US of A ... need advice - banking and credit score
« Reply #21 on: March 03, 2015, 05:44:20 PM »
Got a new CC approved just myself!

I went ahead and tried Discover Card. They approved me off the bat!

I also tried to open a Capital 360 account and just went for a Savings account which has no credit report pulled. The guy on the phone said that people that are already clients once they sign up for a checking they dont get a credit report pulled either... so i went for savings and then later ill open a checking as well.
sounds like you're off on the right track.  One thing I'd caution you against is trying to open too many lines of credit too quickly.  That can negatively affect your score.
Instead, wait a few months before opening a Capital 360.  After that, I don't really see a reason to open more cards - just concentrate on the two you have and work on slowly increasing their limits and paying them off in full every month.

Thanks for the input. I just got my first  FICO score which is something that discover card gives you access to from time to time.

Well I was surprised since it says my FICO score is 793 points!! I even checked if it was the right name and right  social security number and yes everything right...