Credit History of Immigrants

Credit history usually applies to only one country. Even within the same credit card network, information is not shared between different countries. For example, if a person has been living in Canada for many years and then moves to the United States, when they apply for credit cards or a mortgage in the U.S., they would usually not be approved because of a lack of credit history, even if they had an excellent credit rating in their home country and even if they had a very high salary in their home country.

An immigrant must establish a credit history from scratch in the new country. Therefore, it is usually very difficult for immigrants to obtain credit cards and mortgages until after they have worked in the new country with a stable income for several years.

How to establish credit records

If you're a young person just starting out in life and have never financed a car loan, a computer, or other major purchase, how do you begin to establish credit?

First, consider applying for a credit card issued by a retailer, such as Sears. 

You must be at least 18 years old to be approved for a credit card.  Why?  Because under contract law, a minor can rescind a contract at will in most circumstances.   If a credit card issuer were to give a credit card to a minor, the minor could charge up to the credit limit and then rescind the contract and refuse repayment.  Minors wanting to have a credit card in their own name must have a parent, guardian or other adult over the age of 18 contracts for the credit card.

You Must Have An Income. This does not really need an explanation.   Would you lend money to someone who had no means of repaying it? Your credit line will be very small if you have a small income, but you must start somewhere.  If you make your payments on time, your credit line will be increased after periodic reviews.

You must have a telephone number in your name.  If you don't have a telephone number at all, you will not get unsecured credit.  Likewise, if you can be contacted only from a telephone number that belongs to your Uncle Joe's second cousin, this will make lenders very nervous and they will be much more likely to decline to give you credit.

You Should Have Checking and Savings Accounts.  There is a reason that you are often asked if you have a checking or savings account when applying for credit. This is used to score your credit worthiness.  Answering "yes" boosts your odds of getting credit; answering "no" does the opposite.    Just don't answer falsely; it is an act of fraud to give false information when applying for credit. You can open a checking account for as little as $100 in many places and increase your credit score a little bit.

Stay in one place.   If you move from apartment to apartment or city to city, this will send up red flags all over the place.  Lenders are concerned about you disappearing and not being able to locate you.  Living at the same address for a long time adds points to your credit score.  The longer you stay at one address, the better.

Stay at the same job.  Moving from job-to-job is frowned on by lenders, too, because it shows instability and makes them less likely to approve your application, particularly when you have no credit history.  If you can't keep a job and you have no credit history, you're at a much higher risk of being unemployed and, consequently, unable to pay your debts.  Working for the same employer for a long time adds points to your score.

 Pay Your Bills on Time.  Once you have been issued credit, it is very important that you are not late making payments or even worse, miss making a monthly payment entirely.   Missing a single payment will damage your credit rating for years, and being late several times will come back to haunt you.