Thanks

I am a Grad student in USA, coming from a country in South Asia. When I first came here, I had zero credit history. I landed with about $2000 in cash. I guess my bank account created the first entry in my credit history here.

As I was totally ignorant about “Credit history”/report/bureaus, for several months, I used cash and my visa check card, even using the latter online!! As I didn’t have credit history, I had to put a 100$ deposit to get electricity and a similar deposit to get a land phone line.

After a couple of months, I decided to get a credit card, and started applying. But, as I had zero credit history (save for my checking accounts), I was turned down by not one but almost 6-8 card companies. All of them said I had no credit history, so not eligible.

Then I turned to my school’s credit union, which had a visa card. They were nice enough to give me a credit card with a $500 limit. After using it for 5 months, I got the discover student card, amex blue cash for students etc.

Even after being in USA for 5 years now, I think the short length of my credit history is a negative factor in lowering my credit score.

What works: Establishing a bank account asap in a new country, and then trying to find one contact at the bank with whom you can work on a regular basis. Once you’ve got a “banker-friend” – preferably someone you’ve actually met rather than just talked with – you can ask lots of questions and get recommendations and introductions. To the maximum extent possible and reasonable, I’ve tried to use the bank to arrange savings accounts, car and health insurance, mortgages, or whatever, so that you rapidly build a portfolio and they have visibility/feel reassured. This may limit some opportunities to play the field, or to be able to move monies around to chase interest rates or whatever, but in the end, I think it’s worthwhile and also simplifies the process. I also try to provide a lot of positive feedback to my banker-friend whenever she/he is helpful. My French banker is so motivated that whenever she sees something she thinks can earn more interest on an account, she calls and writes at once. Our Danish banker was incredibly helpful when we moved to France and helped with a bank-to-bank introduction and a bridge loan…I’m not sure how that would have worked without him.

I have used my banker also to help when nieces/nephews were visiting and needed a local (European/based) debit card. In our case, the banker set up sub-accounts under my primary card, after we’d submitted various doc’s (passports, principally) and I’d signed up to be fiscally responsible. If the visitors had remained here for a longer period, then we’d have worked out a longer-term strategy…using his know-how.

One quirk of most European countries is that an electricity bill/phone bill, showing your home address, is often something you need to show to prove that you live where you say you do. Why this is adequate proof is beyond me, but it is very widely accepted and required.

Most European banks are internet-based to an extent that the US doesn’t seem to offer, with cheques being nearly unknown and many more payment options/transfer capabilities and cross-border transactions to choose from. (I know this will be hard for US readers to believe, but the US banking system looks very primitive, seen from Europe.)

What doesn’t work well: as Dad points out, when your credit history is out of date, it’s a massive pain in the whatever. You end up dealing with supplying lots of data on your financial life (which you may not really fancy doing) to a bunch of people just so you can get your bona-fides in place. And even then it’s difficult. The US is the worst for this, I suppose because there is more bad debt (?). But France is no slouch, either, at requiring lots of proof of fiscal strength/solvency, especially — and understandably — if you are doing a big transaction like buying a house.

US websites are often bad at being able to handle orders from outside the US/Canada, by the way. Not that that’s what this topic is about, but… they force a zipcode/postcode in North American format, can’t handle a non-US formatted phone number, and heaven forfend if you actually want to add a billing address outside the US!

On this topic, they English are just as bad, by the way…want to order something and have it shipped to some one else? then…fax a copy of your electric bill (I mean…fax!) to them, along with a copy of your (electronic?) order. yeeks. what century is this?

anyway…that’s a bit of a ramble…