Building a Solid U.S. Credit Score: Essential Tips for Indians

Establishing a U.S. credit score can be challenging for Indians or any foreign nationals moving to the United States. However, it’s essential to build credit history for a variety of reasons, such as obtaining loans, renting apartments, or even getting a job. Here are some steps Indians can take to establish a U.S. credit score:

1. Obtain a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) To start building a credit history in the United States, you’ll need an SSN or ITIN. An SSN is issued to U.S. citizens and eligible noncitizens, while an ITIN is assigned to those who don’t qualify for an SSN but need to file taxes. Once you have either number, it will be used to identify and track your credit history.
2. Open a U.S. Bank Account Opening a bank account is the first step towards establishing a financial presence in the United States. A checking or savings account will not directly impact your credit score, but it’s a prerequisite for obtaining credit products that will help build your credit.
3. Apply for a Secured Credit Card A secured credit card is an excellent option for individuals with no credit history. These cards require a security deposit, usually equal to the credit limit, which serves as collateral. Make sure to choose a secured credit card that reports to all three major credit bureaus (Equifax, Experian, and TransUnion) to ensure your responsible usage will contribute to building your credit score.
4. Get a Credit Builder Loan Credit builder loans are designed specifically for people with no or poor credit history. You’ll borrow a small amount, typically $300 to $1,000, which is deposited into a savings account held by the lender. You’ll make monthly payments, including interest, over a set period. Once the loan is paid off, you’ll receive the money in the savings account. These loans help build credit as long as the lender reports your payments to the credit bureaus.
5. Become an Authorized User If you have a family member or close friend with good credit in the United States, ask if they’d be willing to add you as an authorized user on their credit card account. As an authorized user, you’ll be able to use the credit card, and the primary cardholder’s responsible usage will reflect positively on your credit report. Make sure the credit card issuer reports authorized user activity to the credit bureaus.
6. Obtain a Co-Signer If you’re unable to qualify for credit on your own, consider asking someone with good credit to co-sign a loan or credit card application. A co-signer is legally responsible for the debt if you fail to make payments, so be sure to make timely payments and use the credit responsibly.
7. Pay Bills On Time One of the most critical factors in building a good credit score is making on-time payments. This includes rent, utilities, and any loans or credit cards. Late or missed payments can have a negative impact on your credit score.
8. Monitor Your Credit Report Regularly review your credit report to ensure all the information is accurate and up-to-date. You can request a free credit report from each of the three major credit bureaus once a year through AnnualCreditReport.com.

By following these steps, Indians and other foreign nationals can start establishing a U.S. credit score. Building a credit history takes time, so it's essential to be patient and use credit responsibly.