| |
 |
If you plan to remain in the U.S. for a while, you will want to begin
establishing a good credit history as soon as possible. As a foreign
national in this
country, it is not always easy to begin this process. Slowly and a little at
a time is usually the best way to start.
Once you have a bank account <see our article on
Basic
Banking>, you may be eligible to apply for a charge card or a
credit card. A charge card <such as
American
Express> requires that the
balance be paid in full each month. A credit card <such as
MasterCard, Visa, and American Express Optima> allows you the option to pay a small amount on
your balance over a longer period of time and charges you interest on your
balance. Even using a card once a month to buy something small and paying
the total balance off immediately will begin to show that you can be
considered a "good risk" when the time comes to make a major purchase
and you need a bank loan or mortgage.
As a new immigrant, if you are turned down for a credit card it is likely
due to a lack of information on your credit report. You may try applying for
a card at a major department store or a mail order catalog company. If you
are a student and have no or little income, you may not qualify for any of
these cards. Watch the areas on your campus where notices and advertisements
are posted for students. The major credit card companies send application
forms to colleges to be posted specifically for students. These cards allow
only a comparatively small credit limit, but they do not expect applicants
to have an established credit history, and for that reason it is easier to
qualify. Once you begin to use the card and to pay it off responsibly, you
will quickly begin to build your good credit history.
A Word of Warning
Do not be seduced into using your credit card unwisely. Interest
rates on these cards are usually very high once you have gone beyond the low
introductory APR <annual percentage rate> and, when used without restraint,
one can end up deep in serious debt very quickly.
Other important things to keep in mind in
building your credit report history is to pay your bills on time. Medical
expenses, utilities, rent or mortgage payments, car payments, credit cards
-- all of these should be paid by their due dates. If they are not, you may
find your credit history marred. This can effect your attempts to rent an
apartment, to buy a car or a home, or to have utilities services begun.
These negative entries will be accessible to any lender or service provider
requesting your credit history and may stay on your report for seven years
or ten years or even longer, depending on state law and your own
vigilance to maintain a correct and accurate credit history.
There are three major sources where lenders check your credit history. These
are: Equifax, Trans Union, and Experian <formerly TRW>. These companies
make their profit by compiling the information on you from all of the
creditors and lenders who request reports and selling it back to them. We
recommend that you write, call, or fax for a copy of your credit history once
a year from at least two of them. One copy of your credit history per year
can usually be obtained without a charge. A copy of your
report may also be obtainable online. These reports will show any credit
cards you have, the limits on the cards, your payment history, any loans you
have taken out, any court dealings <such as divorce, liens and bankruptcy --
all of which are considered negative in reviewing a credit application and
will remain on your report for about ten years>, current and previous home
addresses and places of employment. If there is erroneous information on the
report, you should have it corrected. If there are omissions you should
attempt to have these additions made. Having corrections made is often
time consuming and frustrating. Depending upon the change you seek to have
made, the finance reporting companies will sometimes refuse the information
coming directly from you. You may need to then contact your bank or lender,
employer or landlord -- whoever can officially provide the additional or
corrected data. It is sometimes necessary to hire an attorney to have wrong
or out-dated information removed. Make every effort to have an accurate, clean credit record
on file.
One note of interest :
You may have ruled out buying a home because of a tarnished or
unproven credit history. The home you seek to buy is usually considered excellent
collateral for the lender, however, and -- while you may be turned
down for minor applications by
comparison -- you could find that a mortgage company is most willing to lend
you money to buy a home.
In the Rules of Financial Credit
1. Do your research. Comparison shop for the best deal AND know
which companies are requesting information about you and what they are
finding out.
2. Be responsible. Don't live by credit. Don't take on
more in mortgage or car payments than you can really afford. Don't make a
habit of using one credit card to pay on the balance of another.
3. Don't make assumptions. Rather than presume you don't
qualify for something, make the application and find out. If you are turned
down, find out why.
No one else is looking out for your best interest. Be sure that
you are!
©
MurthyIndiaDotCom & Murthy
Immigration Services
Pvt. Ltd.
2004
|
