Building a Credit Score as an International Student in USA

credit report

So this is where it gets tricky. To get a US credit card you need a credit score in the US, and to have a credit score, you need a credit history, for which you need a credit card… Settling into a new country is tough enough without this added catch-22 situation.

You could, of course, take a secured credit card, or one with an exorbitant annual fee and interest rate, but you don’t want to spend your hard-earned money on this. So how do you get a credit card for students?

This is where Zolve can help. We provide zero fee credit cards for Indian students moving to the US with exciting rewards even before they travel, based on students’ credit history in India. Zolve credit cards offer high credit limits at affordable interest rates so that you can shop for all your needs and build a good FICO score simultaneously.

Students with no Credit score

Having a good U.S. credit score gives you better financial credibility in the eyes of lenders and hence they are willing to lend you money at lesser interest rates, so you can borrow money at an affordable rate and then payback. As a matter of fact, other factors like your wealth, assets, existing debts, etc. also play a role in the calculation of the interest rate you get but credit score is the most widely used and tangible indicator. The best thing about a credit score is that this one metric is totally in our control. It is in your hands how responsibly you manage your finances and pay back debts in a timely manner.

How is credit different in the U.S. from other countries?

Most countries have their own system of scoring credit, so even if you have established a credit history in your home country, you will need to begin again when you move to the U.S. Credit in the U.S. is represented by a three-digit “score,” which ranges from zero to more than 800. (Generally, scores around 700 or higher are considered good.) There are three credit bureaus in the U.S.—Equifax, Experian and TransUnion—that keep track of your credit history and create your score (so you actually have three scores, which may differ slightly from each other).

The bureaus evaluate your credit based on a few main categories. They consider your payment history—whether you have made payments for previous credit accounts consistently, and on time. The credit bureaus also consider how much credit you are using, and whether your debt is at (or close to) your approved credit limits.

The interest rate on a home loan or a car loan varies from bank to bank; however, if you have a high credit score, you can get a discount on the interest rate. If you have a score of 750 and above, banks will offer you loans at a competitive interest rate. Banks charge cheaper interest rates for consumers with a high score and higher interest rates for people with a low or poor score. Therefore, it is important to build a good credit profile and monitor your credit score from time-to-time.

The Zolve Card helps you build a great U.S. credit score from the time you arrive. We report your payments to the U.S. credit bureau and our app will give you tips to build your FICO score, send payment reminders and limit alerts. It’s probably obvious that the higher your credit score, the better. But there is a conundrum in the credit process: in order to be given credit, you must first show a good credit history, which you cannot do until you have been given credit! So, what is the way out of this dilemma? Start small.

Apply for a credit card with a low limit, use it consistently, and make payments on time. If you are able to, consider opening a joint credit card, by asking someone with established credit history to co-sign the account with you. Consider applying for a credit card created specifically for new immigrants to the U.S., such as one offered by Zolve.

Unlike other credit cards, Zolve’s card provides a quick, easy, all-online application that does NOT require a Social Security Number or U.S. credit history, making it the ideal first credit card for an international living in the U.S. to start building credit here. Once you have established a history of financial responsibility by making payments on time, you can request an increase in your credit card limit to grow your credit, as well. Finally, make sure you make payments on all your debt on time—whether credit cards, car loans, mortgage payments, or student loans, they all impact your credit score.