Credit Cards

You can usually use your credit card(s) from your home country in the U.S. But you may want to have a U.S. credit card for these reasons:

• To avoid high transaction fees or bad currency exchange rates
• To help you establish a credit history here in the U.S.
• Because there will be occasions when a foreign credit card will not be accepted (such as buying a cell/mobile phone in the U.S.)

Being a customer at a U.S. credit union or bank will improve your chances of getting a credit card or loan from them. If you already do business with a credit union or bank here in the U.S., you may want to apply for a credit card there because they know you and they value your business.

About Credit History

Developing a good credit history (whether you responsibly repay money) in the U.S. can be useful. It can help a landlord assess whether an apartment should be rented to you, help you avoid surcharges on mobile phone services, help you get lower rates on car insurance, and more. If you never use U.S. credit of any kind, it doesn't mean that you'll have a good credit history because most lenders prefer to see a history of credit and debt payment.

You may initially find it difficult to establish a good credit history in the U.S. Here are some tips:

• Get a U.S. credit card.
• Don’t get too many U.S. credit cards. One or two cards are enough.
• Open checking and savings accounts. Lenders see bank accounts as signs of stability.
• Always pay all your bills on time. Your bank can set up automatic electronic payments from your checking account, or you can develop reminder systems so that you are never late.
• Do not put more on your credit card than you can pay off in a month. You do not have to pay interest on a credit card to get good credit scores. It is much smarter to pay off your credit cards in full each month.
• If you cannot pay off the entire amount owed on your credit card, make at least the minimum payment promptly.

Credit Reports

A “credit report” contains a history of how you have paid your bills, how much open credit you have, and anything else that would affect your creditworthiness. Your “credit score” is developed by assessing all of the information on your credit report. Credit scores are established after you have had credit in the U.S. for at least six months.

Using the credit score, lenders can predict with some accuracy how likely you are to repay a loan or make payments on time and how much of your available credit you actually use. Keeping your credit use to less than 30% of your credit limits (10% is better) will help you get the highest possible credit score.

A low credit score reveals to lenders that the borrower poses a potential risk, so lenders usually will add a premium to the money borrowed to protect themselves. Individuals with bad credit scores pay dramatically different interest rates (and thus, dramatically different monthly payments) on similar loan amounts than individuals with good credit scores.