The Newcomer's Guide to Building Credit in the US
You're new to the US. You don't have a (good) credit score yet, but you know it's important. Be it for your next apartment, your car lease, or just to feel more integrated in the US of A. This guide brings you up to speed on credit score as if you'd been born here. And we address the most common issues newcomers face based on more than 200 interviews with our community. Buckle up!
Credit scores are a pain…
…for almost all newcomers to the US
If you recently arrived in the US, you've most likely been asked for your credit score, but didn't have one yet. Depending on where you're from, the concept of a credit score may have been more or less familiar to you, but either way, you've probably faced one of these situations.
Hardly found an apartment that didn't require a score (or had to pay a fortune for a guarantor)
Got rejected for a credit card (or with an embarrassingly low limit)
Couldn't sign up for phone/internet/utilities (or had to pay a deposit)
Got quoted outrageous premiums for insurance
By now you've gotten through that somehow. But how do you make sure it never happens again? SettleKit is here to help:
What's a credit score anyway?
Official definition
"A prediction of your credit behavior, such as how likely you are to pay a loan back on time, based on information from your credit reports."
— Consumer Financial Protection Bureau, consumerfinance.gov
Good vs bad scores
Credit scores go from 300 to 850. These numbers can feel a bit like Fahrenheit: you probably don't have an intuition for the numbers yet. Here's a quick overview of who's typically in each band.
| Range | Who's typically here |
|---|---|
| 300–579 (Poor) | Allegedly, Mike Tyson when he filed for bankruptcy in 2003.1 |
| 580–669 (Fair) | Likely your first scoreAmericans with a few late payments or cards near their limit. Most lenders will still approve you, but at higher rates and with bigger deposits. |
| 670–739 (Good) | Your score after 6 monthsRight around the US average of ~713. Always paid on time. Enough for most cards and a mortgage, just not at the best rates. |
| 740–799 (Very Good) | Your score after 6 months, if you take care of itWhere financially successful Americans regularly land. This is where the best rates, no deposits, and the easiest approvals begin. |
| 800–850 (Exceptional) | Taylor Swift is allegedly up here2. You can be a Swiftie...eventually!3. |
However, good scores must be “thicc”
Banks and landlords don't just look at your score, but also at your file. They check how many accounts you have, and how long you've had them. As a newcomer to the US, you have neither many, nor old accounts, so you get treated as a “thin file”. With a thin file, even a good score will get you turned down.
Make your credit file “thicc”:
- Breadth: Build towards 3+ credit accounts. You can do this today.
- Length: Honestly, just let time pass and never close your oldest credit cards.
More tips in chapter 4.
We try to be more serious…
What makes a good score?
Calculating your score is NOT straightforward
Did you know that there isn't just one official credit score? There are at least a dozen. To understand that, we need to take a look under the hood. Who reports your credit data? And how is it turned into a score?
We've broken it down for you in this interactive walkthrough:
Five factors make up your credit score
Different scores weigh different data points differently. You will most often see the below split, based on the “FICO 8” score, one of the most important and representative scores. Other scores may weigh differently, but the basic principles are the same.1
Click to learn.
What are you struggling with?
FAQ
Frequently asked questions
Probably not yet. A score typically needs about six months of US credit activity before the first one is generated. If you haven't opened a US credit account, you have no score on file for now. See chapter 4 ('Build credit') to get started.
No. Having an SSN doesn't create a credit file. You only get a score once an institution (usually your first credit card issuer) reports your activity to the credit bureaus.
Yes. A card opened with an Individual Taxpayer Identification Number (ITIN) builds a real credit file. Pull your free annual report at AnnualCreditReport.com to see what's on it.
It's the difference between FICO and VantageScore. FICO needs about 6 months of credit history before it can generate a score. VantageScore can produce one almost immediately. Different apps use different scoring models.
Use the free annual report from each of the three credit bureaus at AnnualCreditReport.com. It shows exactly what's on file. Then match what you see to the four profiles in chapter 3 ('Your situation').
No. Your home-country credit history doesn't transfer. Your US credit file starts from zero. (See chapter 4, 'Build credit', for one workaround.)
This guide is based on publicly available research and is intended for general informational purposes only. It is not financial or legal advice. Credit scoring practices, eligibility, and program terms vary by lender and can change over time. When in doubt, consult a nonprofit credit counselor or a licensed financial professional.
Sources used in this guide: