Credit history in the USA.
To build a credit history, you must have an American Social Security Number, which is issued once and for life. All visitors on a Green Card, work visa, student and Work & Travel program receive this number. On a tourist visa are not eligible to receive a room. After filing for asylum, you can receive a social number in 150 days. insurance.
How is a social security number linked to a credit history? In the US, three credit rating agencies that track the credit history of individuals and legal entities. They receive all the information related to lending, non-payment of various fees and so on. Since in the US there are many people with the same name and surname, who are sometimes even neighbors, for this reason, it is convenient to track the credit history through Social Security, which is unique for everyone.
In which case you need a credit history:
- While you are renting one room, a credit history will not be needed, but if you decide to rent a separate apartment, you will encounter a credit history check. The landlord wants to be sure that you are able to pay the rent, therefore, in addition to evidence of income, he will check how much you are responsible in relation to financial obligations.
- In the US, there is no culture to borrow money from friends; if necessary, everyone turns to banks. To get a credit card or a loan, a 100% credit history is already required, the amount to which you can apply and the interest on the loan will depend on it.
- With a good credit history, you can get a Student Loan to pay for college. Usually, it is issued at a low interest rate and payments start only after graduation.
- The day will come when you decide to buy a property and apply for a mortgage, there will already largely depend on the credit history. Banks have certain requirements on a rating below which it is not possible to get a mortgage, if I am not mistaken, this is 660 points. The initial deposit on the mortgage (from 3.5% to 30%) will depend on your credit history, and the annual percentage will also depend.
- Often, when finding a job, serious companies check the applicant’s credit history. From it, they can judge how responsible a person is. As I myself have often come across, those who have a bad credit history, more often in all cases the same irresponsible.
- For those who are engaged in business, you need to pray for your credit history. To expand a business, financial investments are always required. In American banks it is relatively easy to get a business loan; no collateral is required to receive an amount of up to $ 100,000. When submitting, the company’s credit history and tax returns for the last two years are considered. Legally, a company receives a loan, but all banks require business owners to act as guarantors, for this they also check their personal credit history. The credit history of the owner of the company prevails in the decision to issue a loan.
- When buying or leasing a car, the credit history will depend on how much you can take the car and monthly payments. In addition, the price of car insurance will depend on credit history (insurance in the USA is obligatory)
How to start a credit history. The most difficult thing is to get the first credit card, from which the credit history will begin. Below are the options.
- Try to apply for credit cards at local stores.
- In some banks you can get a credit card, showing that you have a steady income (letters from work, payroll, etc.)
- If you are familiar with a good credit history, they can act as guarantors. In this case, if you do not pay the loan, the guarantor must do it for you.
Picture Credit: kalhh