My credit history vanished when I moved to the US, so I took 4 steps to start building up my credit all over again
- When I moved to the US from Canada in 2016, I assumed my credit history would move with me - but it didn't.
- After years of establishing credit in Canada, I had to start from scratch in the US.
- To build credit in my name, I became an authorized user on my husband's credit card, rented an apartment where our rent payments would be reported to a credit bureau, automated our bill payments so we'd never miss one, and opened a credit card meant specifically for people trying to build credit.
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As a Canadian moving to the US in 2016, I had wrongly assumed that my excellent credit history would automatically transfer over. I was in for a rude awakening when I tried to open an account with my local utility company only to be told that I had no credit profile.
Establishing credit can be a big obstacle for newcomers to the US - I was essentially starting from scratch when I moved across the border. Having a good credit score means it's easier to rent an apartment, get a credit card, and open other types of accounts. It was incredibly frustrating when I tried to start up internet services only to find out I had to put down a deposit first.
The good news is that I was about to boost my credit score. Here's what I did:
1. I became an authorized user on a credit card
Lucky for me, my husband is a US citizen with an excellent credit score. It meant that I had to rely on him to do things like open up accounts for internet and utility services - but I wanted to build my credit history quickly so I didn't always have to rely on him.
One of the first things we did was have him add me as an authorized user on one of his credit cards, so I was considered a secondary user. Going this route meant I got a jump start on my credit building journey, because that account appeared on my credit report.
2. I paid our bills on time
My husband and I are generally good stewards of our money, but I didn't want to risk the chance of accidentally missing a payment, therefore affecting my credit score.
To ensure all our bills were paid on time, we automated as much as we could, including our credit card bills. Each month we checked the statement to make sure there were no fraudulent transactions and that we had money set aside in our checking account to cover the bills, but we scheduled the payments to happen automatically.
I also made sure our credit utilization wasn't too high. Credit utilization is the ratio of how much you're spending to how much credit you have left, and it's a major factor in your score - the lower, the better. My husband called his credit card issuer and asked to increase the limit, then we made sure not to max out our credit cards to ensure our credit utilization ratio was low.
3. I made our rent payments count
In some cases, you can get your rent payments reported to some of the major credit reporting bureaus, like Experian. That way, you can use that to build credit history which can boost your score, assuming you pay your rent on time.
When my husband and I were apartment hunting, that was one of the first things I asked. In most cases, multi-family units that are run by larger property management companies will report your payment history to the credit bureaus. Luckily, we found a place that allows electronic payments and that reports to the credit bureaus, helping me to further establish my credit history.
4. I opened my own credit card that offered the best chances of approval
I wanted to strike out on my own and get my own credit card. While I was fortunate to have been an authorized user on my husband's credit card, I wanted to see whether my credit was good enough.
When researching credit cards, I specifically looked for ones that gave me the best chances of approval. This meant looking at credit cards that were best for those with no to fair credit. Some of these credit cards can come with high APRs, but it shouldn't matter if you don't intend on carrying a balance. I also opted for an unsecured credit card so that I didn't have to put a deposit down to open an account.
Here are some of the ones I looked at:
- Capital One Platinum Credit Card
- Credit One Bank Platinum Visa
- Wells Fargo Platinum card
- Capital One QuicksilverOne Cash Rewards Credit Card
I eventually settled on the Citi Double Cash Card because my credit score was pretty good - it also offered cash back rewards with no annual fee. I did have to submit more paperwork like a bill to confirm my address, but I ended up getting approved.
After a few months, I noticed my credit score shot up to the mid 700s, but because my credit history was so new I waited another year or so to apply for more cards
Building your credit when you have none can be frustrating - trust me, I've been there. Luckily, there are many ways you can do so that are fairly simple and straightforward. The key is to be patient, keep checking your credit score, and keep learning new ways to boost it.