Hey everyone! If you’ve lived in the US, even if it’s only as an international student, chances are you’ve heard about “credit score history” more than a couple times. It is a very important aspect of financial lives of anyone who lives in America, and one that arises many questions, especially if you’re an international student.
First of all, what is credit score about? Here’s an understandable explanation:
A credit score is a numerical expression based on a level analysis of a person’s credit files, to represent the creditworthiness of that person. A credit score is primarily based oncredit report information typically sourced from credit bureaus.
Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate losses due to bad debt. Lenders use credit scores to determine who qualifies for a loan, at what interest rate, and what credit limits. Lenders also use credit scores to determine which customers are likely to bring in the most revenue. The use of credit or identity scoringprior to authorizing access or granting credit is an implementation of a trusted system.
Credit scoring is not limited to banks. Other organizations, such as mobile phone companies, insurance companies, landlords, and government departments employ the same techniques. Credit scoring also has a lot of overlap with data mining, which uses many similar techniques. These techniques combine thousands of factors but they are more or less similar or the same.
Read the whole article here: wikipedia.org
Having a good credit score can make life in a place like NY a little easier: it is needed to rent an apartment, to get a phone plan with most carriers… and these are things that international students need too. Credit score usually comes from your credit history (among other things) which in the case of a student comes mainly from using a credit card. What happens to international students then? Can we build a credit score?
Well, the answer to that is pretty complex. The best option for international students to start building credit score is to apply for a credit card. The difficult thing here is getting approval for a credit card being a foreigner. I found a very helpful article that tackles a lot of doubts on this matter:
Yes, you can have a credit score as an exchange student. You may already have one. Credit scores are an important part of our financial lives in America, and if you plan to be in the United States for very long at all, you should pay attention to yours.
Michael Abramsky, senior consultant at CreditFirm.net, says, “Employers, insurance companies and lenders all look at your credit score. So if she ever plans on applying for a job, obtaining financing for a vehicle or getting insurance for said vehicle, a good credit score will save her money and open many, many doors.”
There is no requirement that you be a U.S. citizen to have a credit score. Abramsky says that anyone with a tax identification number (TIN) can have one. “Both F-1 and J-1 students can apply for either a tax ID number or a Social Security number,” he says.
If you don’t already have at least one credit card, consider applying for a card that caters to newcomers and first-time cardholders. You don’t need a large credit limit — in fact, a lower limit can make it easier to stay out of debt.
I recommend you read the whole article here: creditcards.com
My best advice right now is that you go to your bank and ask what are the chances of getting approved for a credit card. If you’re using a big commercial bank in a big city, I’m sure they already have something for people in your situation.
If you plan on staying in the country after graduation, then you definitely need to think about building your credit score.
I will write about credit card options for international students soon, when I get enough clear information. Feel free to comment or shoot me an e-mail if there’s anything you think I can add! Thanks for reading and see you soon!