While these are certainly important, they are not the whole picture when it comes to creating your new life abroad. Two critical, although less well-known, factors are obtaining a Social Security Number and establishing a credit score history.
A Social Security Number is required for all noncitizens working in the U.S. And having one makes it easy to apply for bank accounts, loans, and government services. Meanwhile, many new immigrants learn that they cannot easily rent an apartment or obtain loans. Due to their lack of US credit history. Fortunately, these two critical components of their financial life in the United States. Go hand in hand and can settle down fairly quickly.
Social Security Number
A Social Security Number, or SSN, is a unique nine-digit number assigned to U.S. citizens at birth. Non-citizens authorized by the Department of Homeland Security (DHS) to work in the United States must also have one. The number is used to report your wages to the government and determine your eligibility for Social Security. A national insurance program that offers retirement, survivors, and disability benefits. Social security numbers also serve as de facto national identifiers. And are requested by a wide range of businesses, including banks or creditors.
It’s free to apply for a Social Security Number, and you can do it before or after your move:
Apply in your home country at the same time you apply for your immigrant visa with the US Department of State. Your Social Security card will be mailed to you within 3 weeks of your arrival in the USA See application details here.
Or, apply after you arrive in the US, in person at your local Social Security office. You can find a list of offices in each state here. It is recommended that you wait at least 10 days after arriving in the United States. This makes it easier for DHS to verify your documents. And will speed up processing. A list of documents you will need to present to apply can be found here.
Once you have your social security number, you’re ready to tackle another common hurdle for newcomers: building credit.
It is advisable to obtain your credit history from your bank or credit bureau before leaving your home country. Unfortunately, the credit that you have created in your home country may not transfer to the US, and you will likely need to build credit from scratch once you arrive. Fortunately, it doesn’t take long – the main type of credit score used in the US is a FICO score, and you can earn one after you’ve had an account open and active for six months.
Credit Score Rating
Your credit score is a rating of how trustworthy you are to potential lenders. It is determined by your credit history at one of the three major US credit bureaus – TransUnion, Equifax, and Experian. Each keeps a record of your current and past accounts, how much you owe on each, and your history of paying on time.
Credit Scores Range
Credit scores range from 300 (lowest) to 850 (highest). A higher score means you are a lower-risk borrower with a history of responsible credit use. People with higher credit scores are more likely to be approved for loans and receive lower interest rates. That means an excellent score can save you real money over the life of a loan. Employers in some states may also use your credit report as part of employment decisions, although 16 cities and states, including California, New York City, and Chicago, have laws that strictly limit the collection and use of this information.
So how can a newcomer build credit? Start small and aim for a single line of credit; Your best bet is to apply for a secured credit card at your local bank or credit union. Since these cards are backed by funds in your bank account, they are easy to obtain with little credit history.
Advantages:
You can also take advantage of an existing banking relationship: If you have an international credit card, call and see if they’ll convert it to a US credit card Another option is to get a small loan from your local bank. You are likely to pay a high-interest rate, but timely payments will build your credit history quickly.
Once you’ve opened an account, it’s important to use it wisely. The three most important factors in determining your credit score are your payment history, credit utilization rate, and length of credit history. These three factors together account for 80% of your FICO score, so make sure you have them checked.
Payment history:
The most important factor in determining your credit score. Establishing a flawless history of making payments on time is important, as late payments and delinquent accounts correspond to your score. Automatic payment settings can help you effortlessly keep up to date with your invoices.
Credit Utilization Ratio:
This is the ratio of balance to limit or the total amount of credit used in any account. Keeping this ratio below 30% will improve your credit score. For example, if you have a $ 1,000 limit on a credit card, carry a balance of less than $ 300. Using more than 30% credit on any account can be a sign that you are having financial problems. To maintain optimal utilization, you can pay your balance or ask the credit card company to increase your limit.
Length of credit history: The longer your accounts are open, the higher your credit score.
