Can International Students Build Their Credit Score in the US?
As an international student, you won’t have a U.S. credit score. Learn what a U.S. credit score is, why you need one and how to start building your credit score.
It can be important for international students to build credit while they’re in the U.S. so they can take out a loan, get a credit card, or score an apartment or off-campus housing.
As for whether international students have a credit score, the answer is it depends. Let’s take a look at what a U.S. credit score is, whether you can use your international credit score in the country and how to build a U.S. credit score.
What is a credit score?
A credit score is a three-digit number that gives lenders and other third parties an indication of how responsible you are with financial products, specifically loans. The higher your score — which ranges from 300 to 850 — the more responsible you are in the eyes of lenders. In other words, you likely will pay back loans on time because you’ve proved you have the financial capacity and are responsible enough to do so.
Credit bureaus — the three main ones are Experian, Equifax and TransUnion— look at your credit history to arrive at your credit score. Factors include payment history, how much credit you use and how many new accounts you’ve opened recently.
Why is a credit score important?
A credit score is important for your financial life in the U.S. Students who want to take out credit cards or loans in the U.S. should aim for a high credit score so they can increase the chances of their loan application being approved. Again, the higher your score, the more responsible you appear to be in terms of managing loans.
Even if you don’t want to take out a loan, having a good credit score is important. If you want to get car insurance, for example, some insurance companies may look at your score — the lower it is, the higher your premiums could be.
While living on campus won't require you to have a good credit score, finding off-campus housing might. Many landlords and property managers review your credit score to determine if you’re likely to pay your rent on time. In some locations, utility companies look at your credit score to determine whether you’ll need to pay a deposit in order to start and continue service.
Can students use their international credit score?
The short answer is no. International students do not have a credit score in the U.S. unless they take steps to build one. Even if they have an international credit score, it unfortunately won’t carry through to the U.S.
If you have a credit card that was issued in your home country and you’re able to use it in the U.S., that’s fine. However, those credit cards won’t help you build your U.S. credit score, as your credit history will be reported only in your home country.
That means if you’re planning to live in the U.S. long term, it might be a good idea to consider building a U.S. credit history as soon as possible.
How can international students build their credit score?
International students can start off by getting a credit card. However, your options may be limited. Not all financial institutions issue credit cards for international students, and if they do, the choices aren’t as plentiful as they are for U.S. citizens or permanent residents.
Depending on the financial institution, you may need to submit an individual taxpayer identification number. You may be able to apply for one online through the IRS depending on your visa status. In some cases, there are credit cards specifically for international students that require you to submit only your passport information when you apply.
Credit card issuers will also look at other factors, including your income. If you can, consider getting a part-time job or working on campus to show you have enough money to pay your bills.
If for some reason your credit card application is declined, you can consider signing up for a secured credit card. A secured credit card requires you to make a deposit (collateral) that acts as your credit line. The deposit “secures” your card because if you can’t pay your balance, the credit card company will take your deposit.
Whatever credit card you choose, make sure to do your research. Some will charge annual fees, and APRs vary.
A secured loan — sometimes called a credit builder loan — may be another option. Instead of receiving the money you’re borrowing upfront and paying it back over time, you make fixed payments to a lender, which holds the amount you borrow in a bank account until the end of the term, at which point you get access to the loan amount. The lender will report your payment activity to the U.S. credit bureaus, thereby building your credit score.
You also may want to consider getting a co-signer who is a U.S. resident and has a good credit score. A co-signer is someone who will be responsible for your loan or credit card payments in the event you can’t pay.
Becoming an authorized user on someone’s credit card is another way to build your credit. The primary cardholder authorizes you to use their credit card. You’ll get your own credit card, and ideally your score will increase faster, as it’s typically tied to the primary cardholders’.
Being a co-signer or a primary cardholder with an authorized user can be risky. If you plan to ask someone to fulfill either role, make sure you first have a conversation about your responsibility for the loan or credit card — as in how you’ll make on-time payments — so they don’t end up footing your bill.
Sarah Li Cain
Sarah Li Cain is a finance writer and a candidate for the Accredited Financial Counselor designation whose work has appeared in places like Bankrate, Business Insider, Financial Planning Association, Investopedia, Kiplinger, and Redbook. She’s the host of Beyond The Dollar, where she and her guests have deep and honest conversations about money affects their well-being.
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