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Thread: Question about Credit History

  1. #1
    Hi,
    I am new to US and I am trying to get some credit card. In this process, I applied for credit card with MBNA and got rejected. I came to know through one of my friends, that even If we don't have any credit history and if our request for credit card is rejected, it will affect our credit history. According to him, there were some initial points and it will get reduced each time when our request for credit card rejected, and it will be a bad credit history. Kindly anybody please let me know about how credit history will be build and how it works?

    Thanx in advance..

  2. #2
    Hi,
    I am new to US and I am trying to get some credit card. In this process, I applied for credit card with MBNA and got rejected. I came to know through one of my friends, that even If we don't have any credit history and if our request for credit card is rejected, it will affect our credit history. According to him, there were some initial points and it will get reduced each time when our request for credit card rejected, and it will be a bad credit history. Kindly anybody please let me know about how credit history will be build and how it works?

    Thanx in advance..

  3. #3
    Since you are new don't let anybody make the important desicions in your life, specially here in the States. If you don't know find out, read, but don't make desicion base on somebody opinions. The credit is like your driving license, you have to learn how to drive...and then get the license and drive.
    3 ways to get credit: 1.- apply for a gas station credit card; those are the easy ones. 2.- Open a secure credit card, deposit the money and it works like a debit card with the difference that this secure card is reported to the credit bureaus. 3.- Retail stores like Burdines, Sears, Wall Mart also are easy to get.
    Good lock and welcome to America.

  4. #4
    Sekhar, don't listen to Bill when it comes to the cards he is stating you can get with ease with the exception of getting a secured credit card. Sears and Walmart are some of the hardest cards to get especially if you have no credit history. Before you apply for anymore credit get as much information as you can get on how credit works. Look at consumer websites( such as clarkhoward.com)about credit cards and loans etc and go to the websites of the credit bureaus( Equifax, Experian and Trans Union). When I first came to this country 6 years ago, the most come phrase I got from creditors was "no credit history was worse than having a bad credit report. Its a catch-22 situation because you have to apply for credit to get credit to start a credit history. I was wrongly advised to go out and apply for as much credit as I could get in order to build a history. What I didn't know at the time was that every application I submitted counted against me whether I was successful or not. It did not take long for me to build up a whole pile of credit enquiries on my report and this actually became the main reason why I was getting turned down!!!!!!! Creditors don't like to see too many credit enquiries as they take the opinion that you are irresponsible for applying for so much credit in such a short space of time and so are a higher risk. Once you have managed to get a couple of credit cards etc and you become further established in this country try for a mortgage and car loan. These types of credit do tend to boost your credit score significantly. At the end of the day, it is not only just a case of getting credit but you have to maintain it over a long period of time. In six years, I have never had a late payment.

    I am not going to advise you on which credit cards to apply for but I will say that the only companies that took a risk with me were Capital One and Best Buy. With Capital one they gave me a whopping credit line of $200!!!!!!! but I stuck with it and eventually built up a good credit line. Good luck and get informed before you apply again.

  5. #5
    me and my friends have gotten 3K credit lines from Bank of America without credit history

  6. #6
    Sekhar,

    I wont tell you how to do it. But here's how I did it:

    Came to US, no credit history. Called a credit history building company (Was First bank if I recall). They said they would give me credit card if I am willing to pay for it. I accepted, paid $200 and put it on my credit. Then, they took $50 for processing fees (another form of scam). But that's was ok as long as I get to build my credit hystory. Continued with First Bank for 6 months, then got a credit offer from capital one. Applied and got approved for $300. Still ok. Kept making payment on time. The Capital one credit grew to $3000 over 2 year period. Then got platinum credit cards from Chase, Bank of America and MBNA. Now, I have shut most of them down. Just have 2 credit cards open. Over a 4 yrs period, no missed payment, all balances below 10%. That gives me a good credit rating. For one thing, I do all I can to protect my credit rating. I hope this gives you an idea.
    There are plenty of stuff on internet that you can use to learn about credit rating. There are 4 main things I have learned:
    1-Dont use more than 25% of your credit limit.
    2-Never miss a payment.
    3-Your credit report should be accessed only when it's really necessary. So, dont respond to all the offers you get in the mail.
    4-Any other bill you receive (Water, electricity, health, traffic ticket, towing fee, tuition, etc.) should be taken care of right the way. Never let your bills go into collection. If they do, that will affect your credit rating for 7 to 10 years.

    Good luck.

  7. #7
    Now H1/L1 visa holders can build credit history by obtaining a loan via people-to-people lending website.
    Check H1bProsperLoans.com for details, it is really cool.

  8. #8
    My parents had the same problem when the moved to the US. They had multiple credit cards in our home country (visa, MC, etc.) but US banks didnt care. Other foreigners suggested my parents to try Capital One. My dad CALL their customer service and explained the situation. Capital One suggested the "secured credit card", in which you deposit money as a "collateral", a garantee that you will pay the credit card balance. Even then, their credit line was less than 500 dollars. But it helped them start their credit history.

    The easiest option, if you have someone you totally trusts you, is getting an additional credit card from someone who already has a good credit history. My husband "added" me to his accounts and that is how I started my credit history (it's like if you inherit it but you still have to build it with time).

  9. #9
    Following is an e mail from my friend. I hope that helps.

    Hi guys,

    Your credit history is one of the very important thing ,if you want to settle here. You will know how much it matters when you want to buy a car or a House. THe APR is largely dependent on your credit history. I recently financed my car, and I did some research and I also spoke with some Bankers regarding "How can you build your credit History". I am giving a brief conclusion from my experience, though It might change from person to person.

    1.One thing I realised is ,Inspite of paying all my credit card bills on time, and in Full, My credit score was not as good as it should be since Now I have 3 Year long history.From my discussion with a Bank manager of a Wells Fargo Branch, I found out that, By paying your all bills on full, It is just that you are using your credit card to buy some stuff and you don't want to carry cash. Because unless you borrow something that means if you don't pay your entire bill then only it will go to credit bureau. That doesn't mean that we should pay a lot of money in APR on not paying entire bill. The trick is if you have a $1000 balance pay about 990 or 995, so the APR won't be that much on the remaining balance that is $5. SInce you haven't paid the amount in full, it will go to credit bureau and they will be able to see that you are a good borrower since you are paying the most balance . As a student you can start with a credit card which gives you 0% APR for say first six month,on that period of time you make sure that you atleast pay the minimum payment on time even though you are not charged for anything. And even if you don't havve a credit card with 0% APR , you should atleast leave $5 to $10 unpaid of your balance every month, this way you are not going to be charged too much for APR and you will still make a good credit history



    2. DO not apply for too many credit cards, just to get a T-Shirt.keep mostly 2 to 3 . I understand in the beginning upon arriving in the country you don't have none so one start applying for a lot but that hurts in a long future.so ask people which applications for credit cards are easily approved.

    3. SOme people move out and they have outstanding bills coming to their old place and sometimes just by ignorance that goes to late payment and then later on reported to collection agency , and that is very bad from your credit history point of view. YOu should look for electronic statements as much as possible, and once a month check each and every card you have even though you are sure you haven't used that in that particular month, there might be a charge which might show up on your statement inthe next month, even though it was charged previous months, and believe me there has been cases.

    4. Avoid applying for those "Target" "Old Navy" credit cards just to get some discount,because you generally don't spend that much (Unless you are shopping freak) on them and tend to avoid paying attention to their paper bills and you generally don't enroll for electronic billing for those.

    5. Also try to go for a reward card, like a skymile card.since you are in dallas you should go for American Airlines skymiles card, though they have annual fees but sometimes they come out with a deal , say no annual fees for this year etc.This card will help you in a longer run

    6."Identity fraud" is a bigger issue than it used to be to prevent if possible try to distroy your statments when it don't matter, you don't want to loose it to go to some stranger's hand .

    7. Cards like sony citibank, they are great, i mean they have fixed APR and all, but when it comes to claim rewards, you will have to buy sony products, and they are a lot more than some other good brand names.You buy products sometimes just to get rewards, if you have gone for a card with cashback, you will end up saving a lot of money on buying electronics (when you buy it from other brands).

    8. Open a account with credit Unions like DCU or Texans credit Union. They generally offer a low APR when it comes to financing. Remember when you are going to buy a used card avoid financing from a car dealership, since they tend to give you a lot higher APR than the one you will get from this credit unions.

    Note: The suggestions made above are purely based on personal experience and experience of friends and relatives, the effects might vary from person to person. I would strongly advised you to talk to the people who have been in States for long enough. They might be a better adviser than your peers.

  10. #10
    The best way to get credit and not with credit cards is: go to your bank and deposit $1000 into a CD. (You may be able to get a loan to purchase the CD) Then get a loan against the CD. Pay back the loan faithfully. Then go to get a car loan and pay it back faithfully (generally 6 months of payments on a car loan will enable you to develop credit.) Depending on the country you are from, you can get credit bsed on your previous credit reports. (ie Canadians can get credit if they provide their Canadian SIN.I didn't do this but I could have.)

    This is what I did and within 2.5 years, I qualified for a mortgage with both the Bank of America and Wells Fargo.. My first credit card was a Macy's. But try to stay away from the credit card trap. And never go with the preloaded cards. They are a scam and cost you more than they are worth. And creditors know the preloaded companies. Develop a relationship with your bank. And use a well known bank not Uncle Fudds neighborhood money laundering pit. A well known bank with brances across the country will give you more opportunities.

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