Banking Category Banking: the easy, simple banking guide

How to Build Credit for a New Immigrant

Getting credit as a new immigrant can often be difficult, but life can be even more complicated if you don't build that vital credit score. Your credit score allows you to qualify for a bank loan or pay bills or everyday expenses with a credit card, or pay off large purchases in monthly instalments. Here are seven steps that a new immigrant--with no prior credit record--can use to help build her credit score.

When you get your immigration visa, pay attention to all of the required steps that allow you to get your Social Security number. It's nearly impossible to build a credit score without a Social Security number. Some visa conditions will require a trip to a Homeland Security office near you, or with some visas your Social Security number will arrive in the mail.

Get a gas card. This is perhaps the easiest way to build your score up from zero. Most major gas stations will offer a card that allows you to prepay for your gas. Easy to get, this also puts you on credit agencies' radars. You can also use it to pay outside at the pump. Use it as much as you can.

Get a bank account. With a little build-up in a credit score, most banks offer a prepayment credit card that you can pay up front and use in the same way as a regular credit card. This usually ranges from between £97 and £195. Before you choose your bank, check out available options for this type of card.

Sign up to a credit agency to monitor your credit score and history. Most agencies will charge a small monthly fee for the information. You can use this to see if anything is adversely affecting your credit score and check your progress.

After six months or so, your credit score may be high enough that you can go get that elusive credit card. Capital One is a popular choice for potential borrowers with low credit scores. Typically, your borrowing amount will be low and your interest will be high as your are still considered a risk to lend to. Your bank may also begin to send you offers about their own credit card if you have shown yourself to be financially responsible.

Be sure to use all of your cards as often as you can, pay them off in time and, as your credit score mounts, don't borrow to the full extent your credit allows, as this can drop your score. Don't apply for credit too frequently, as this can cause your score to sink. By now your score should be high enough that most major credit card companies are sending you daily offers in the mail. You will also be able to take out loans with a wider selection of lenders offering lower interest rates.

About the Author

Craig Howie's writing and photography have been published on the home pages of CNN.com, AOL.com and LA.com. He edits a Los Angeles-based automotive Web site and is a California stringer for a major UK newspaper. In former lives he was a copy chief at a Southern California metropolitan daily, Web site manager and arts writer.

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