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How to Establish & Start Building Credit in the US

Understanding what a credit report is could be confusing. Learn what information a credit report contains and how to get your credit report for free.

By Mike Faden



>    Establishing credit history and getting a credit card can be far more important in the U.S. than in many other countries.

    Many landlords, employers, mobile phone providers, and even water and electricity 
utilities may want to check your credit history.

>    Now, for the first time, new services make use of cross-border credit histories—and may include your home country.

If you’re new to the U.S., you may be surprised–perhaps even shocked—by just how important it is to establish credit here. Many of the companies that provide essential services and products will check your credit history before they accept you as a customer, because they consider it to be a key indicator of whether you’ll pay your bills.

For example, companies may check your credit history or credit score when you’re:


  • Applying for a credit card
  • Signing up for a cell-phone contract
  • Renting an apartment
  • Applying for a job
  • Buying or leasing a car
  • Obtaining utility services like water and electricity
  • Getting cable TV and internet service

If you haven’t established credit in the U.S., you may face a variety of problems in these situations. You may need to produce alternative evidence of creditworthiness (such as proof of employment), put down a cash deposit, ask your employer or someone else with established credit to assume joint responsibility for a loan, or accept a higher loan interest rate. In some cases, you may simply be unable to obtain a product or service. 

So if you plan to live in the U.S., it’s vital to understand how to establish credit—and to start doing so as soon as possible. 

What Does “Establishing Credit” Mean?


Establishing credit typically involves building a record of timely payments on loans, credit card balances or other debts. When someone checks your credit score, they send a request to one or more of the big U.S. credit bureaus, which are companies that track your payment history. The credit bureau analyzes your payment record and other factors and generates a credit score that indicates how likely you are to pay your bills.

Many lenders and other service providers consider a credit score of 670 or above out of 850 to be “good credit.” But some may require scores of 700 or above to approve you for specific products or services1. You may hear credit scores also called FICO scores, after one of the main data analytics companies that focuses on credit scoring services.

How to Establish Credit

Traditionally, one big obstacle for newcomers to the U.S. has been that it takes time to build credit from scratch. It typically takes at least six months of payment account history to produce a credit score, for example.2

So it’s important to start as soon as you can. But there’s a challenge: in many cases, you may need to demonstrate that you already have good credit in order to obtain the products and services that help you build credit—like credit cards and loans. But if you don’t already have good credit in the U.S., how do you start building credit?

Fortunately, there are ways for how to establish credit from scratch. Here are some of the most common methods.

Leverage Your Credit History from Another Country

One reason people have traditionally needed to start from zero when building credit in the U.S. is that it’s been impossible to import credit history from abroad—so an excellent history of on-time payments in another country meant nothing to U.S. lenders. Now, however, a service from Nova Credit makes it possible to use your credit history from another country to be considered for services and loans in the U.S. 

Nova Credit essentially translates credit reports from a growing list of countries—including Canada, the U.K., Australia, India, and Mexico—into equivalent reports for U.S. lenders. Companies that partner with Nova Credit in the U.S. incorporate that information directly into their application process, making it possible to be considered for credit cards, loans, apartments and other services. Once you’ve used this method to establish a U.S. credit account, you will start building your U.S. credit history.3

Apply for a Credit Card

Especially with the rise of cross-border credit history services, it’s not impossible for a newly arrived U.S. resident to get approved for a credit card. In addition to a standard card, there are others that may have easier approval criteria, such as a retail store card, a card with a cosigner (who shares legal responsibility for charges), or a secured card (which requires a cash deposit).

Become an Authorized User

If you have a close friend or relative in the U.S., they may be able to add you to one of their credit card accounts as an authorized user (also known as an additional card member). Even though your relative is the primary card member and legally responsible for paying off the balance, those payments may help you to establish and start building credit. You’ll also be able to make purchases with the card. However, if the primary card member misses any payments, there will be a negative impact on your credit too.

Get a Credit-Builder Loan

A credit-builder loan, as its name suggests, is a type of loan that can help you build credit history. Typically, you give the lender a refundable deposit and receive a loan for the same amount. You then pay back the loan in installments. The loan payments are reported to the credit bureaus, helping you start building credit history. When you’ve repaid the loan, you get your deposit back.

Use Your Relationship with an International Bank

If you already have an account with an international bank in your home country, you may be able to open a credit card account with that bank’s U.S. subsidiary.4

The Takeaway

It’s vital to understand how to establish credit in the U.S., because your credit will help you obtain many of the services and products you’ll need for everyday life. Companies may check your credit when you’re renting an apartment or applying for a job, as well as when you apply for financial products like credit cards or loans. You can start building credit in several ways, including using your credit history from another country to be considered in the U.S.

The Author

Mike Faden, a British expatriate living in the U.S., has covered business and technology issues for more than 30 years as a writer, consultant and analyst for media brands, market-research firms, startups, and established corporations. Mike also is a principal at Content Marketing Partners.

 “What is a FICO Score?,” Fair Isaac Corporation;
 “What are the minimum requirements for a FICO score?,” Fair Isaac Corporation; 
 “How to Transfer Your Credit Score to the US,” Nova Credit; 
 “How International Students and Immigrant Workers Can Get a Credit Card,” Nerdwallet;