Navigating life as an international student in the U.S. is no small feat. Between finding the right housing, excelling academically, and finding a social community, the challenge of building credit may not be your top priority. Credit scores are based on financial history, and being a newcomer to the U.S. without a Social Security Number can make the process of building solid credit more daunting than usual. In fact, it can take up to 2 years to build a robust financial profile from scratch. Luckily, there are a few simple ways to get started on your path to a strong credit score.
1. Get the ball rolling with a secured credit card
Secured credit cards differ from traditional lines of credit in that they require an up-front cash deposit equal to the desired credit amount. While a secured credit card shouldn’t be your only strategy for building credit long-term, it’s a great first step and generally doesn’t require you to have previous credit history or a Social Security Number.
2. Maintain a good debt-to-credit limit ratio
Once you begin to establish credit, you’ll notice your debt to credit limit ratio has a big impact on your score. Aim to utilize 20–30 percent of your total available credit line at a time. This illustrates your financial responsibility to lenders, employers, and landlords. It also helps you avoid accumulating too much debt. Keeping your ratio low will go a long way to show others that you manage your finances well. As an example, if you have a credit card with a $1,000 credit line, aim to keep your monthly revolving balance below $300.
3. Ask landlords and phone providers to report your payments
Take advantage of any information you have about your financial habits and it could pay off in the future. If you consistently pay your bills on time, ask your landlord or cell phone provider to report your payments to the credit bureaus. While their reporting won’t impact your FICO score, it will help alternative lenders see your track record for financial responsibility.
4. Become an authorized user on someone else’s U.S. credit card
If you don’t have the credit history needed to receive approval for a traditional credit card in your name, you might consider becoming an authorized user on someone else’s U.S. credit card. On-time payments on the card of a spouse, family member, or friend can boost your credit over time.
5. Start building credit with the card made specifically for you
International students should have simple routes to attain the lines of credit they need to succeed in the U.S. ModernLend is the credit card created with global citizens like you in mind. We understand the financial challenges of international students, and that’s why we evaluate your creditworthiness based on alternative metrics such as your education, employment and financial. Obtaining a credit card through ModernLend doesn’t require you to have a Social Security Number or FICO credit score. Join our waitlist and start dreaming bigger today.
Whether you’ve been in the U.S. for a long time or are just now settling in, it’s never too late to start building good credit. Interested in joining the ModernLend community? Follow us on social media and subscribe to our newsletter for even more tips to foster your financial health.