Trying to build good credit history, improve credit score?

Question

I'm a foreigner and don't really have credit history in the US. I have a checking/saving account (for a few years now), cell phone. Have not been delinquent with payments. My credit score is low 500/not existant (depending on what company runs my credit report). How do I get it to go higher?

Answer 1

You need a credit card but it will still take you a few years.

Answer 2

Get a loan on a car or what ever. Pay it off, and your credit rating will improve.

Another way is to get a loan secured by money. This may sound strange, but go to a bank you've researched and open a CD.

A couple of weeks later ask to talk to the loan officer that you spoke to originally when doing your research. Ask for a loan secured by the CD.

If your CD is $5,000, ask for a $3,000 loan for a year, then pay it off in 6 to 8 months. You can use the excused you want to purchase a computer or need it to pay for college classes. Whatever the excuse, don't say it is to improve your credit rating or for consumer items.

Usually they will loan on that pretty easy.

Another way is to get a secured credit card. This is a card secured by money. You pay $500 and up that is used to secure the credit limit of the card. Use the card very occasionally, and don't carry a balance on it.

After you get that one card, other companies will try to get you one of their unsecured cards. You can get just one, but no more. After that, close the secured credit card and get your money back.

By all means, don't have several credit checks done in a short time. This will cause the credit rating from one of the big 3 to go down.

I have a FICO score over 800, but one hit me for 50 points because I had 3 credit checks in a short time. They viewed that as someone who was taking on too much debt or too many credit cards.

Good Luck.

Answer 3

It sounds like your score is low because you have no credit. You need to build a credit history by getting a credit card or another type of installment credit (maybe buy furniture on installment). From there on, make sure you are making your payments on time, and keep a nice big cushion between your balances on your accounts and your credit limits. If your accounts are always maxed out, this won't look good.

It will take a few months for your score to pick up a nice amount and maybe a couple of years for it to be "really good."

Good luck, and remember that your credit rating is easily one of the most important assets you have! Don't lend your credit to others (i.e. co-sign others' loans besides your spouse, take out credit cards for others). Even family members like cousins might be too risky (personal experience) - you know the saying about not lending friends money if you want to keep your friendship.

Answer 4

You aren't going to see big improvement in your score in only 7 months. You will need at least 24 months of consistent, on time payment history to improve your score. Getting a secured credit card might help. Use the card for small purchases and pay in full every month. This will give you additional good payment history. Paying on those student loans will help. But it's just gonna take time for the bad to age off and to build up the good.