You’ve sorted your stay, visa applications, packed your bags, and you’re all set to move to the US. Now all that’s left is to obtain a credit card that’ll come in handy in a new country. If you’re stuck and unsure how to go about it — we’re here to help! When moving to a different country, you must be wondering how to get a credit card without a credit score. In this post, we’ll take you through the process and a few simple steps you’ve got to follow to get a credit card as an international student.
The importance of Credit Building as an International Student
Back home in India, you can seamlessly apply for a credit card. But in the US, it’s a different ball game altogether. Banks and lenders look up the credit score that you’ve built in the US, and your Indian credit history is of no significance. So, the priority is to establish a good credit score, and you can do this by applying for a secured credit card. And that’s fairly simple — you have to submit a security deposit to get one, and most student-friendly banks refund the deposit if you maintain a reliable credit score for around 6-8 months.
Do I Need a Social Security Number to Apply for a Credit Card?
While it is possible to get a credit card without an SSN, it’s always recommended to get one as it strengthens your legitimacy. Most student visas, including the F-1, are eligible for an SSN and its benefits. After securing the authorization, you can apply for a part-time job, on or off-campus. The Department of Homeland Security sanctions you an SSN after completing a Form SS-5 submission and submitting your work permit, immigration status, and proof of identity.
Apply For a Secured Credit Card
A secured credit card functions a lot like your regular credit card. In fact, it’s great for international students as you can build a credit score with a secured credit card before applying for a credit card with a higher credit line. To get this card, all you’ve got to do is pick a card with low or no annual fee, low APR, submit a security deposit and get it. You should also consider perks like rewards, cash backs, payment policies, and universal acceptability. As a student, factors like low foreign transaction or exchange fees, travel rewards, fraud protection, etc., are worth counting as you can also save up quite a bit. Zolve is one such banking platform that provides financial support to international students.
Most secured credit cards report your credit score to all the three major credit bureaus (Equifax, Experian, and TransUnion), and just so you know, most banks and lenders check your credit score on these bureaus. A credit card is usually approved after they evaluate your credit history.
Now, Establish a Credit History
You have a secured credit card now, and you have to plan your expenses wisely. Whether you’re shopping for groceries or hitting a mall — use your credit card to pay the bills. Even if you’re spending as low as $50, make use of the card and be extremely punctual with your repayments. To ensure you don’t miss a single payment, go ahead and set up auto payments, alerts, and timely reminders. The only way you can solidify a solid credit score is by paying your dues on time.
Another way to establish a credit history is by getting a co-signer or an authorized user on your card. If your friend, roommate, or relative has been in the US for a long time, consider opening a joint account with them. This way, you can get your hands on an add-on card or build a credit history by being a verified user on their credit card. Just ensure that your co-signer has a good credit history too.
If you’re unable to get a co-signer, you can always explore the option of speaking to your home bank in person. For instance, if you’ve been banking with an international bank in India, have a conversation with them to understand your creditworthiness. If you can go for a preapproved request with them without affecting your credit score, there’s nothing like it. For this, you can contact your branch manager directly.
Don’t Forget to Monitor Your Credit Score Before Applying for a Credit Card
So, you’ve been building a credit history with a secured credit card, you’re paying your dues on time, and it’s been nearly 6-8 months. The natural next step is to apply for an unsecured credit card or a regular credit card with a higher credit limit.
Remember that your credit score or FICO score matters for that. Banks and lenders extend credit cards to those with a FICO score between 670 to 739, and you should try and maintain that score. Since they check your credit score on the three major credit bureaus, you can also keep an eye on your score on these sites. If you think there’s a possibility to enhance your credit score, focus on that before applying for a credit card.
All Said and Done, Apply for a Credit Card
You’ve sorted everything — pat yourself. Now, make that final decision and choose a credit card that best fits your requirement. A wise thing to do is to choose a secured credit card that lets you upgrade to an unsecured credit card after usage. In that case, you’re sorted! But if you’re looking to apply for a different card altogether — pick a student-friendly bank. Be sure to maintain enough money in your savings account and have proof of steady income to qualify for a credit card.
While submitting your request for a credit card, don’t apply at more than two places. Because if your request is rejected, your credit score falls.
Now, go ahead and apply with all the relevant documents, address proofs, identity proofs, etc. When you finally receive a credit card, be responsible and pay your dues on time. We recommend planning your budget wisely and sticking to it to avoid any extravagance that leads to poor credit history.
