Establishing a Credit Rating

When you first move to America, you will not have any credit history, and American Credit Bureaus do not recognize and will not transfer individual's credit ratings from other countries. This makes it very difficult to establish a credit rating, and unless you have one you will be turned down for any credit applications. However, there are several ways that you can establish a credit history. See the following points.

• The first thing to understand is Credit Bureaus. They are the reporting agencies that compile information on every individual in America who has used credit at some time in their lives. When any company or organization wants to find out a credit rating on anyone, they pay a fee to the Credit Bureaus to find the information they need. This is the criteria they use to accept or decline a credit application.
• There are three major Credit Bureaus in America - Equifax, Experian, and TransUnion LLC. Your mission is to get your name on their registers and in a positive light.
• The fastest and easiest way to establish a credit history in America, is if you already have an American Express credit card in Australia. It's as simple as transferring your account from Australia to America. By using the card in America, within a couple of months you'll be listed with the Credit Bureaus.
• The Australian American Association also offer the American Australian Visa Card. At the time of writing this, I have been unable to determine if owning this card will contribute to your American credit history, so remember to ask questions before applying.
• The most common way for Aussies to establish a credit history in America, is to apply for one or two "secured" credit cards.
  • "Secured" means that you pay in a deposit (maybe $500) which will then be used as your "credit".
  • Make sure that the credit card company you obtain your "secured" card with, reports to the three major Credit Bureaus.
  • Shop around for interest rates - some companies will "take advantage" of your need to establish a credit history by charging very high interest rates.
  • Search online for banks and companies that offer "secured" credit cards - there are quite a few. See the link under "Must-Have" Links below to help you get started on your search.
  • Make sure to use your card as often as possible, and most importantly - make your payments on time!
  • After two or three months, you'll start getting credit card offers in the mail for "unsecured" accounts - in other words, "real" credit cards. :)
  • Once you get a credit card offer that you like, apply for it and you'll most likely be approved. Hold onto your "secured" card for a little while longer until you've started using and paying your new account. Close your "secured" accounts when you feel comfortable.
  • This might seem like a complex way of establishing a credit history, but it works!
• Have a friend or family member be a "guarantor" for you on a small loan - perhaps a car loan. This will get you onto the Credit Bureau registers fairly quickly (two or three months) too.
• If you are married to an American, have him/her add you to their existing credit card accounts. Again, you will eventually get pre-approved offers in the mail that will enable you to get your own card.
• No matter which way you decide to go, don't rush into it. Make sure you know exactly what you're going to do before you do it, and do your research. Good luck!

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