In a country like the United States, it’s important to have a credit record also referred to as ‘credit history’ for almost everything from buying a house to getting a student loan, from renting a place to getting a vehicle. Credit plays a major role and is a deciding factor for a person’s credit capability. The lending agency becomes reassured of your capacity if you have a good credit score.
As an international student, it might not be imperative in the very beginning to have credit, but gradually it is advised that they should start building upon it. It might not be needed at the moment, but it definitely helps in the long run and proves you to be a reliable borrower. Without a credit history, it is almost impossible to apply for a house at good rates or even be able to get a loan at a low rate of interest. Developing this score is considered important in this country and hence even as an international student one should start building upon this process without any hesitation.
The easiest way to start with a credit build-up is by using a credit card. There is a simple way to this. Apply for a credit card and use it for most of your purchases and then pay off your charges each month or each week. The better you are with the usage of your card and the timeliness of your payments, the higher goes your credit score. In addition, plastic money is always safer than hard cash. Now there could be a risk of you being forgetful and missing out a payment. For this the bank automatically alerts you beforehand so you stay on track while building up your credit history. You can also choose an automatic payment that is due every month or choose to pay manually.
Unlike in previous years, it is now very easy to get a credit card. The banks and corporate units in the US have some special cards and schemes for international students. It is easy for you to get a credit card at home if you apply online. It is hassle-free and does not require cumbersome documentation. The major banks might require you to have a previous credit history before they initiate you a credit account. But some other credit units and online banking corporations have made it much easier and accessible for students. Some of these are:
- Capital One
- Open Sky
- Deserve Edu
These banks do not require an SSN or a security deposit. In addition, they also offer a $0 annual fee and no foreign transaction fee. Most of them also offer 1%- 5% cashback on all your purchases. Not only this, but these credit companies report your payments to all three major US credit bureaus. They could charge you a late payment fee, but they do give enough notices before you cross your payment deadline.
All this banking and credit-related information might be overwhelming for an international student. It is advised to put across all your queries with the online banker or the agency. They answer everything and give you a transparent picture of your funds. One should start now and go slow with the purchases in the beginning. Make payments first couple of months and then get used to it. It actually becomes a routine to use the card and make the payments once you are into a good frequency.
Aanchal Tangri from India is pursuing a degree in English at Truckee Meadows Community College in Reno, Nevada.