As part of President Trump’s strategy to reduce the number of immigrants entering the US, the DHS’s proposal is introducing more ways to screen out the applicants. The public charge rule prevents the entry of people who are highly likely to become public charges. Besides that, it might also affect foreign nationals seeking to adjust/change status or extend their stay.
Since, like most immigrants, intending to settle in the US, you might be starting over, it can complicate matters. Unless you belong to certain groups, like refugees or asylees, the public charge test will apply to you. To find out how to improve your chances of approval, we’d suggest getting in touch with attorney Eric Price at 855.662.2772.
What Is Credit & Why Is It Important?
A credit report mentions all your accounts, the amount you owe, and if you pay your bills on time. It will also have details about the residences you have – or had — in the US. Aside from that, bankruptcies, judgments, and liens also make it on the report. What’s more, your financial history in another country isn’t taken into account – no matter how stellar it is.
In short, your New Immigrant Credit Score and report and credit score reflect your way of handling financial responsibilities while in the US. They will also affect whether you can get loan approvals to buy a home, a car, etc.
Changes to the Rules
The DHS’s new proposed rule about Green Card Credit Score means your score should be in the good zone. Such a rating is close to or slightly above that of average US consumers. One way the US government measures your credit score is via the FICO scale. Thus, to qualify as a visa applicant for permanent residence, yours must fall between 670 and 739. Hence, immigrants must deal with the burden to present a positive financial profile.
Additionally, these rules prescribe that immigration officers scrutinize the past use of public benefits of those applying for adjustment of status. So, it isn’t only the immigrants who are likely to seek benefits who will face scrutiny. Individuals who used public benefits in the past may also be in trouble.
What Will The Impact Be?
The New Immigrant Credit Score rules will make it harder for many people to qualify. When they arrive in the US, they are in a credit invisible state. Any details from their country of origin won’t matter. Credit invisibility won’t discriminate, so the new regulations will affect both the affluent and those not.
Tips for Building Credit as an Immigrant
Knowing How to Build Credit Score for New Immigrants is important because it takes 6-8 months for it to show. Since the lack of a verifiable credit history can work against you, begin by getting a credit card. Follow up with a timely first payment. And don’t worry, there are many programs that provide cards to those who have no credit history. We’d recommend choosing a fully-secured one with a low-balance. Or, be an authorized user of someone else’s credit card to begin creating your credit history in the US.
Here are some extra tips on How to Build Credit as an Immigrant:
Look to Alternative Data
Non-citizens who want to build a positive credit history, alternative data can make a huge difference. While all landlords don’t habitually report that you pay rent regularly to the credit bureaus, some do. Talk to them if they don’t and demonstrate how easy the process is.
Moreover, pay rent electronically, and you’ll see quick improvements in your score.
Use Credit Cards Wisely
Sure, a credit card is a great way to boost your scores. However, the interest fee can work against you if you are not careful. The fee (APR) is there so your provider can protect themselves from taking a risk on you. But the APR will only get added to your credit card bill if you don’t pay the amount you owe in full. So, pay timely and avoid interest on credit cards by paying in full each month.
Turn To Family or Friends
Options like secured cards and credit builder loans are easily available to even non-citizens in the US. But when you get a cosigner on a loan, you can improve your chances of approval for it. This additional person usually has good credit, thus reducing the lender’s risk in giving you money. Not only will the presence of a cosigner boost your loan approval rates, it also gets you a more competitive interest rate.
Your family member/friend is essentially asking to be responsible for your debt when they become a cosigner. Now, as you pay off the loan in question, you keep adding more to your credit history. But if you miss payments, your actions will affect your cosigner’s credit too.
Obtain a Credit Report & Check for Errors
At the moment, you own a credit card, have a cosigner helping you get a loan, and are making credit history for yourself. Those are all good measures for creating a Credit Score for Immigrants. What should be next on your list is to continuously monitor the history. There are several reasons for that. Firstly, for instance, having the history makes you an ideal target for identity theft. Another person can illegally open an account in your name in such a situation. Any debts they rack up, or payments they miss will end up ruining your score.
Secondly, there could be mistakes that become part of your credit history. To prevent both things from happening, monitor your credit report. You get a copy for free from your credit bureau each year. But we’d suggest checking up on it more frequently than that.
Contact Attorney Eric Price Today!
Email Eric Price to find out about other ways through which you can improve your credit score and build credit. Remember, you aren’t doing all this just so you can own a home in the future. Your actions – or the lack of them – will also determine if you obtain permanent residency from the US. The more guidance you have in this case, the better it will be for you!