BY Thomas Simonney Head of International Desk, SVP

Jan 15th 2020

International Perspectives

How to Establish Credit When You’re New to the US

New to the US? Learn how to start building credit today to help you access financial opportunities down the line.

Jan 15th 2020

In the US, your credit history can open doors to financial opportunities, from monthly phone service to the ability to purchase a dream home. But many new residents arrive with little or no credit history or score that’s recognized by US lenders, and that can cause headaches. Looking to lease an apartment or a car? Want to get cable TV or internet service at home? Chances are the provider will run a credit check, so it’s crucial to start building credit now. One way to do this is to open a credit card issued in the United States when you first arrive.

The moment you get your new card, you’ll establish a credit profile and start building a credit score with the three credit reporting agencies: Experian, Transunion, and Equifax. Your credit score can range from 300 to 850, based on things like credit card use, payment history, and length of time you’ve been using credit. It may vary slightly between agencies, but with responsible use of a new credit card, you should see your score improve.

At Bank of the West, we make it easier for newcomers to receive a credit card—even if you don’t have a US credit history. Unlike many other banks, Bank of the West does not require a US credit score to apply for home financing or auto loans. It’s always good to have multiple options when you’re looking at major financial decisions, so the quicker you build credit, the more choices you’ll have in the future.

Here are some tips that can help build credit. The choices you make should be based on your personal situation and financial goals:

  • Get a US Social Security number
  • Work with a newcomer-friendly bank
  • Open a checking and savings account
  • Open a credit card
  • Obtain a car loan
  • Take out a credit-builder loan

On the road to building credit, you’ll inevitably face questions: What should you lease, and what should you buy? What should you pay for in cash, and what should you finance with a loan?

Automobile: Short-Term Lease or Long-Haul Ownership

With a car, how you pay for it depends on how you’ll use it, and for how long. When making your decision, keep the following things in mind:

PAYMENTS Lower monthly payments, fixed fee Pay less over the long term, build equity
REPAIRS Fewer repairs expenses After warranty, you’re responsible for all repairs
MILEAGE USE Can drive a new car more often, but rules apply on mileage use and wear No mileage limit use or restrictions, how you maintain it is up to you

House or Apartment: Fixed Expenses vs. Equity Investment

With a home, depending on your situation, there are arguments both for buying and renting. Here are some things to consider as you make your decision:

LENGTH OF STAY Limited upfront investment, limited lease period for short-term residents Potential longer-term appreciation value, the stability of ownership
COSTS Fixed monthly payment, no maintenance costs, no build-up of equity Upfront costs and ongoing maintenance, but the potential for property appreciation
TAX CONSIDERATIONS While some states offer renter’s tax credits, most do not Potential US mortgage interest deduction on federal taxes
UPFRONT COST No down payment, but may require a 1-3 month security deposit Up to 20 percent of purchase price, which is applied to your home equity

Whether you rent or buy, you’ll find they have one thing in common: your credit score will play a key role in your success in your financial goals, on the best possible terms. Start building credit today to help ensure you have access to financial opportunities down the line.

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Member FDIC. Equal Housing Lender. © 2023 BMO Harris Bank N.A. Bank of the West is a trade name used by BMO Harris Bank N.A. Banking products and services are subject to approval and are provided by BMO Harris Bank N.A.

Securities and variable annuities are offered through BancWest Investment Services, a registered broker/dealer, member FINRA/SIPC, and SEC Registered Investment Adviser. Financial Advisors are Registered Representatives of BancWest Investment Services. Fixed annuities/insurance products are offered through Bancwest Insurance Agency in California, (License #0C52321) and through BancWest Investment Services, Inc. in all other states where it is licensed to do business. BancWest Insurance Agency is a trade name of BancWest Investment Services, Inc., a subsidiary of BMO Harris Bank N.A.

This is not an offer or solicitation in any jurisdiction where we are not authorized to do business.

BMO Harris Bank N.A. and its various affiliates and subsidiaries are not tax or legal advisors.

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