00:00Hi guys, I'm Gabby and welcome to my channel if it's your first time here and if you're
00:05returning, thank you so much and welcome back. Today's video is a little different, but I
00:10think it's an important topic as it gives you guys some things to think about to ensure
00:15that your loved ones who are immigrating here to the US are able to create a strong financial
00:21history here. However, let me put this disclaimer out. I'm not a financial advisor or an expert,
00:27but I am just offering what I know and what I did that worked for me and my family and perhaps
00:33this might be helpful to you as well. But as always, I encourage you to do your own research
00:39on anything that I or anyone else shares with you to confirm that it's best for you and your family.
00:45Okay, we're talking about ways to build your credit once you've moved to the United States.
00:51So why is this important? Well, you will need a way to build credit history in the US to
00:57access financial products and services like purchasing a car, renting an apartment or
01:03purchasing a home. Although you may come from a country that has its own credit system, you'll
01:09most likely be unable to access it here in America. And in the US, just like other countries,
01:15it has its own credit system standards. So understanding it is extremely important because
01:22here we rely heavily on the credit system in regards to finance. One of the easiest and most
01:28convenient ways to build your credit history in the United States is to apply for a credit card.
01:34Now, of course, this isn't the only way. We'll briefly go over other options available to you as
01:40well. But first, let's quickly talk about how the credit score system works in the US. Well, in the US,
01:46the credit score operates on a system of point values. So the higher your credit worthiness,
01:52the more points you are awarded, and the less you're considered a financial risk of defaulting.
01:58Basically, you can be trusted to pay back what you owe. So to maintain a healthy credit score,
02:05it's important to use your credit cards responsibly by paying your bills on time,
02:11keeping your balances low, and not applying for too many credit cards at once. Now, there are
02:17several credit bureaus, but the three major credit bureaus or credit reporting agencies in the US
02:23are Equifax, Experian, and TransUnion. Each of these credit bureaus collects information from
02:30creditors about the borrowing history, how much you owe on what types of accounts, whether you've been
02:36making payments on time. So there are a few key factors that affect your credit score in the US.
02:42And there are several credit score models that can be used to determine your credit score. But the most
02:48commonly used one here in the US is called the FICO score. This was created by the Fair Isaac
02:54Corporation. So its calculations is based on five major factors. One, which is your payment history,
03:01which makes up 35% of your score. So the credit score range in the US is between 300 to 850 points.
03:11Anything over 700 points is considered a good credit score. But before you apply for a credit card,
03:17you will need a social security number. Or if you don't have a social security number, you can use
03:22ITIN or individual tax payer identification number. One option that's available is to apply for a
03:30secured credit card. A secured credit card is a type of card that requires the borrower to put down a
03:37cash security deposit as collateral. The secured credit card issuer will determine the deposit amount.
03:43It can be anywhere from 250 or more dependent on the credit card issuer. So the funds that you put on
03:50your account are used as a protection against borrowing the money from the issuer. So if you default
03:56on a credit card, then the credit card issuer keeps the money that you deposited. It's a great way to
04:02establish credit for new immigrants. My husband opened a secured credit card at the same time that
04:07he opened his first banking account here in the US. And about 10 months later, after showing his
04:13credit worthiness through making on-time payments and keeping his balances low, his secured card was
04:20switched to an unsecured or what's known as just a traditional credit card. Another option available
04:26to you is to get a US credit card with a co-signer. A new immigrant can apply for a credit card by using
04:33their family member or friend or spouse information as the co-signer on the account. They will be
04:40responsible for making the payments if you don't. So the co-signer will need to have an established US
04:45credit history, which can improve your chances of being approved for the credit card once you apply.
04:51But just make sure that the co-signer clearly understands what they're agreeing to. Now, I know
04:56I previously said that you most likely will not be able to use your credit from abroad here in the US,
05:03but perhaps you have a relationship with an international bank in your home country. Some international
05:09banks might use your existing relationship with them in your home country to issue you a credit card in
05:15the US. So these banks will issue a credit card if you have an account back home and they're willing
05:21to extend their relationships overseas. Of course, you will need documentation to prove your residency
05:26status here in the US, like a passport or a valid US visa and possibly a bank statement from your home
05:33country that proves that you have a relationship with the bank that's overseas. Now, of course, there are
05:39many ways to skin a cat. Using a credit card to bill your credit is not the only way to go. Although
05:46credit cards might be considered easier and faster, new immigrants can bill credit without applying for
05:52a credit card. How can you bill credit without using a credit card? Well, you have a few options. There are
05:58several options available. One, you can become an authorized user. Perhaps your spouse or family member
06:05will agree to adding you as an authorized user on their credit card. This is what I did for my husband.
06:12He was added as authorized user on one of my credit cards. But just make sure that the credit card
06:17issue does report the authorized user's activities to the credit bureaus. Also, as a new immigrant, you
06:24might want to consider applying for a credit builder loan as an alternative to credit cards. These loans can
06:31bill your credit by reporting your payment activity to the credit bureaus. The only downside is that you
06:37may have to pay a high interest rate. There's also options to improve your credit by having your rent
06:44payments being reported to the credit bureaus. Some landlords and property management companies will
06:50report rental payments to the credit bureaus. If your landlord doesn't offer this, there may be some
06:56outside service agencies that are willing to do this automatically for you as well. Also, you can
07:03report your utility and cell phone bills to the credit bureaus. Some credit bureaus like Experian will
07:10credit you for utility and cell phone bills that you are already paying. In the past, these payments
07:16did not positively impact your score. But make sure that you take advantage of these credit building
07:22opportunities now. When you open your credit card accounts, it can take up to six months or more to
07:27build your credit score. Of course, your credit score is based on your payment history, your debt
07:32levels and other factors. And the best way to build and maintain a good credit score in the U.S. is to make
07:38sure that you're paying on time. What I've shared is not the only options available. Perhaps you know of
07:44others. If so, please feel free to share in the comments below. But I just wanted to share what my
07:50husband I found helpful for us and to give you a few things to think about to help you prepare your
07:55loved ones to get started on building their credit in the U.S. once they get here. Hopefully, you found
08:02this video helpful. Don't forget to like, share, comment, and subscribe to the channel if you haven't
08:07already done so. Thank you so much for watching and I'll see you in the next video. Bye!
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