I heard that I have no credit history in the Unites States? This is likely true. One of the most frustrating issues that many international staff members and their spouses encounter is the lack of or insufficient “credit history” or “score” in the United States. 

Will obtaining a loan help build my “credit”? YES. Generally, most families can easily obtain a loan, for example for an automobile, or a major credit card from the financial institution where they have established their bank accounts; however, obtaining personal loans or ‘company’ credit cards (such as from an electronic, home improvement, department store, etc.), usually proves more difficult, especially during the first six to twelve months of arrival.

How do I build “credit”? The US system is structured so that an individual begins building their credit history as soon as they begin borrowing money from or open accounts with institutions that report those transactions to the four major credit reporting agencies—Equifax, TransUnion, Experian and Innovis.

What is a Credit Score? Credit scores evaluate a borrower’s credit history using various factors including late payments, amount of time credit has been established, amount of credit used versus the amount of credit available (i.e., you have an average balance of $3,000, but your credit limit is $15,000), employment history, length of time at present home, negative credit information such as failure to pay debts, bankruptcy, etc.

What is FICO? A credit score (explained above) is also known as a FICO score (FICO was developed by and is an acronym for “Fair Isaac & Co.”). The FICO score is an estimate of the likeliness that you will repay your loan, which directly affects loan approval, the interest rate, and the loan terms. If you do not pay your obligations on time or have defaulted on loans or accounts, your FICO score will be negatively affected. The following things can negatively affect your credit score: not paying your bills when due, applying for credit often (a large number of enquiries on your credit report is looked at negatively as it appears that you cannot obtain credit), carrying high balances or using your credit cards to their limit.

Is “lack of credit” a problem? YES, it can be. The main problem for international staff is not bad credit, but lack of credit. Although it may seem unfair, it is legal for insurance companies to review your credit report, which may affect your insurance premiums (including for automobile, homeowners, and renters insurance).

Who reports credit? There are four major credit reporting agencies in the United States: Equifax (http://www.equifax.com); TransUnion (http://www.tuc.com), Experian (http://www.experian.com) and Innovis (http://www.innovis.com ). You can obtain a copy of your credit report from any or all of these agencies for a fee. These major credit bureaus are required to provide, upon request, one free credit report per year by calling toll-free to 1 877 322 8228 or by requesting it on-line at http://www.annualcreditreport.com (you can also request it by mail by consulting the instructions on the aforementioned web site). You can obtain a credit report from all four companies simultaneously, or request a report every three months from a different agency.

I heard that I can obtain a free credit report? You can obtain a ‘free credit report’ but be advised they do not include your FICO score. It is a way of ensuring that no one is attempting to obtain credit using your name and social security number.

Where do I find additional information? On the US Federal Trade Commission web site at http://http://www.ftc.gov or in the ‘frequently asked questions’ (FAQs) section of the http://www.annualcreditreport.com web site. In addition, Consumer’s Union (http://www.consumersunion.org) is a consumer advocacy group that offers detailed instructions on fixing errors and reading credit reports.