The Credit History explained

In the United States each person builds their credit history, which is uses for almost everything you want to hire in your life, be it medical insurance, a mortgage loan or even an website.

The Americans, from a very young age, often ask for loans to finance various expenses such as car or studies and, with it, begin to establish their credit history. This refers to the life of payments of the individual. In it, all payments appear on credit that the person has made in his life when he has hired any type of service, and reflects whether he paid on time or not, scoring each operation and resulting in a number that reflects what theGood or bad paying.

This history, which is associated with the social Security Number, is very useful for companies, especially banks, when they have to lend money or finance a purchase. In addition, in certain services such as electricity or an Internet plan, where there is a risk of default and fixed costs that are returned monthly (installation expenses, router cost, etc.), it is also useful for anticipating whether the client will be honest. In this way, as long as someone wishes to hire these services or for example to rent an apartment, they will review their credit history and thereby assess whether you need additional guarantee deposits, the interest rate or even can receive the service (a very bad score at Credit History can make the company reject sell or provide service). The credit history is collected by three private agencies with the information provided by the entities that provide or sell.

This guarantee system is an important barrier for foreigners, since, when they arrive in the country, they have no credit history and this implies difficulties in accessing rentals, loans or services, which, in general, will be resolved with large deposits or higher costs. (For example, the AT&T telephone company requires deposits of up to $ 500 for the activation of the service if there is no history). Although most deposits are reimbursed after months or years of use, some of them are non-refundable. (AT&T does not easily return $ 250)

Starting to build a credit history for a foreigner is not simple and the decision to obtain it will depend on the time you plan to be in the country and the reason for your stay. For stays under 3 years of age and without the intention of asking for high loans, in general, it is not worth it.

The basis to establish a good history is to ask for credits and return them in a timely manner. The first step is to have Social Security Number (SSN), which, not all visas. For example, for a student, the SSN is achieved at the request of the university, if you are going to work on the campus or in the OPT period. If you are only studying, you do not possibly conceive that number. The SSN is requested in the social Security Administration. In general, SSN will be granted if the immigration status is entitled to work.

Once SSN is available, the easiest way is to go to a bank and request an insured credit card.The bank will require a deposit and give credit to the value of that deposit. In a way, we will be lending ourselves money, but through a bank that will take interest. However, every time we make a purchase with that card and return the money to the bank, this will be reflected in the credit history. When this history or score reaches a certain level, access to normal credit cards will be granted and the needs of deposits and other guarantees will be reduced. It is considered that the minimum period that must be passed with the insured card is six months, and will depend on the number of purchases and reintegrates made.