By Johnny Nezha

Hard Truths that Need to Be Said

“What’s a credit score?” Yup! That was my first question as well. Turns out, if you are not from a country that uses this system (namely Canada, Germany, Japan, the UK, Spain, or Australia), you have never heard of these two words in the same sentence, or anything about the underlying system thereof. Also, considering you might be fresh out of high school, chances are high you would not have had to deal with adult choices as your parents will have had to take care of things for you since you were underage. 

Well, your parents are with you no more, in both the financial and physical sense of the meaning, when you relocate to the United States for your studies. 

I have good news and bad news in this article. I will be talking about my personal experience with the U.S. credit system. Please, please, please, do not make my dumb mistakes. 

First and foremost, the credit system is used to measure your creditworthiness. Thus, your chance and ability of being able to pay back your loans and financial obligations toward an institution or individual.

Make no mistake, credit scores are the single handedly the most important part of the financial identity you will have in the U.S. Nothing, and I mean nothing, unless you carry a huge load of cash with you upfront (by extension, you are liquid rich), will be lent to you otherwise. And probability says that you will have to apply for loans or financing. 

If you think you’re not going to need to upkeep it, hahaha, wait for it, until you discover that your credit score will be used for your ability to pay rent, phone bill, internet (not just loans and debt). It is the sole way of third parties to establish your good/bad habits and for you to apply for credit cards.

Most likely, just like the majority of your peers who study in the U.S., you will apply to work on campus. Only then will you be eligible to apply for your first ever Social Security card. After that very important number hits your mail, you will be required to provide that number to verify your identity everywhere!! I am not joking. Do not share your Social Security number with anyone who is not trusted. Friends are not to be trusted either. Americans don’t go around shouting their Social Security numbers to their friends. I have (mainly) American friends, and I do not know their Social, nor do they know mine. It is taken very seriously in the U.S.

Once you have that number, apply for a credit card that accepts applications with no credit history altogether. The Discover card is usually a good starting point that I have noticed international students apply for. Once approved, you are to revere and venerate this card and worship the deadlines. DO NOT MAKE LATE PAYMENTS and remember, do not spend money if you cannot afford to pay it back. Only use your credit card in small amounts. Do not carry a balance. A balance meaning, if you spend $500 on your credit card for the month of August 2021, you pay only the minimum required, say $100 and you carry forward $400 in debt. 

Remember that the U.S. has  metrics for “credit card usage,” and if it shows that you are maxing out your credit card, your overall credit score will lower. It also lowers the confidence of the financial institution in you since it will appear that you enjoy “living in debt.” Financial institutions will doubt your ability to pay it back.

The mistake that I made early on, two years in, I went back home to Italy to vacation, and I didn’t come back to America for 4 months. I erroneously thought that the balance was gonna wait for me, as I was yachting my life away on my parents’ dime. However, when I got back to the U.S., not only was my balance not there, it had been sent to collections (an agency that buys debt to collect it).

Bottom line, I have a fat report on my credit line that says I had two accounts (both below $500) that were deemed delinquent. Although I paid the balance ASAP, I still see that on my report. My credit score tanked down to oblivion, where not even Satan dares treading, and to be honest, it just doesn’t look good. Only after I got married, and I applied for a loan and car financing with my wife (and her better financial records) have I been able to rebuild my credit score back up again. Once you go far down in the credit score range, it is hard and lengthy to go back up, unless, of course you have co-signers. 

Be cautious, your credit score will dictate everything for you in America, and do not be duped in believing anything else. Guard it with care and use it with discretion, good habits make for a good stable financial future.

Johnny Nezha is an Albanian-born, Italian-raised, marketing student at Los Angeles City College. He loves technology and the power of its innovation and is the founder of a startup called Khleon. His hobbies are skywatching and astronomy.