The "been there done that" thread: life in the US after DV

[SusieQQQ]

Is it absolutely necessary to get a credit card in US? I have worked hard to get rid of massive credit debt and currently fine just with a visa debit card so Im really hoping I’m not forced to get another credit card!

Yes, because a credit record is so critical here. You can get a prepaid one where you can only spend what you pay in first, or give the bank an Instruction not to raise the limit above a certain amount if you’re worried you’ll overspend.

 

[Bob22]

A pity these credit records don't seem to be shared? Mine will be spotless here in NZ. They cannot access these records in the US though I guess? (even though it's a visa)

 

[SusieQQQ]

A pity these credit records don't seem to be shared? Mine will be spotless here in NZ. They cannot access these records in the US though I guess? (even though it's a visa)

Sometimes Amex carries across but generally you have to start from scratch. You also have to actively maintain it - even if you could just import a perfect 850 score, if you took out no credit and didn’t repay anything as you went along that would erode over time.

 

[Bob22]

Thanks. So perhaps I should not pay for a new car up front but leave a bit as a loan just to get a bit of credit history? (even if it costs more). What a strange system, it almost seems to encourage debt.

 

[Laura19]

It's a catch 22 - you won't get a loan without a credit rating! So you need to get a prepaid/secured card to build up your score over the first six months or so. It's impossible to do anything here (rent an apartment etc) without it. It's a bizarre situation coming from a lot of other countries alright

 

[Bob22]

Where do I get these prepaid cards from? From a local bank in my own country?

 

[Laura19]

No you'll need it to be issued by your US bank once you are there get your social security number. Your credit rating is linked to the SS number so it's important that it is attached to the card you get!

 

[SusieQQQ]

Where do I get these prepaid cards from? From a local bank in my own country?

No, you’ll do it at a bank here. Ask for a secured card, capital one are pretty good with them. They’ll ask you to make a deposit upfront and then that is the “prepayment” . If you have a couple of cards and a say a car loan or something, and pay them off of course, you can build up a good rating pretty quickly. You might want to have a look ay the website creditkarma which has lots of tips too.

 

[Bob22]

Thanks guys. Useful tips!

 

[DV immigrant]

hello, i hope im in the right forum, i appreciate if you give your advise.
We have insurrance but if the hospital can help in the deductable by applying for financial assitance. is that consider public charge? it comes from the hospital.
thanks for your opinion.

 

[Lezraf]

hey everyone,

as many of you know, I entered the us on Jan 24th, 2019 to activate my green card. I left the us end of February (I was planning to stay for a long time but...). I'm planning to go back next week (but I'll move definitely in September). Do you think I can enter the US next week without problem ? thank you !

 

[TheBay56]

Thanks. So perhaps I should not pay for a new car up front but leave a bit as a loan just to get a bit of credit history? (even if it costs more). What a strange system, it almost seems to encourage debt.

You are correct, it's a stupid system. And once you fully understand it, you will think it's even worse. In order to get a "perfect" credit score, you need to have like 21 accounts, or other type of loans. They basically built a system where you need to borrow a ton of money, so they can earn, in order to get a really good credit score.

It takes some time to understand the system. I do and I still hate it

 

[SusieQQQ]

You are correct, it's a stupid system. And once you fully understand it, you will think it's even worse. In order to get a "perfect" credit score, you need to have like 21 accounts, or other type of loans. They basically built a system where you need to borrow a ton of money, so they can earn, in order to get a really good credit score.

It takes some time to understand the system. I do and I still hate it

Well, that’s a slight exaggeration. A couple of credit cards and a car loan (watching the outstanding card balances and a good repayment record of course) and you can get above 650 fairly quickly and above 750 within a few years. It’s not a “perfect” score but it’s good enough for anything you need a decent score for. And for things like car and home loans, if you have a spouse you can both be listed on it so you can both benefit credit-record-wise off one loan. I agree it’s kinda dumb you need to borrow to show what a good credit risk you are, but generally you don’t need much more than you’d do anyway (one credit card for convenience in payments/good reward system, and a second as backup for in case the first gets lost/stolen/blocked etc).

 

[Sm1smom]

You are correct, it's a stupid system. And once you fully understand it, you will think it's even worse. In order to get a "perfect" credit score, you need to have like 21 accounts, or other type of loans. They basically built a system where you need to borrow a ton of money, so they can earn, in order to get a really good credit score.

It takes some time to understand the system. I do and I still hate it

I agree this is quite an exaggeration of the credit score system. You don’t need to borrow a ton of money or possess several credit cards in order to have a good credit rating. All it takes is just a couple of credit cards and a car/house loan (which most people can’t afford to outrightly pay cash on anyways). Not maxing out the credit cards is a plus. Also, if you pay off your credit card balance at the end of each month, no one earns anything on it, and you still get a good credit score! - this is to show your claim of “you need to borrow a ton of money, so they can earn ...” is not reflective of how the system truly works!

 

[Xarthisius]

I came to US 4.5yrs ago. After few months I got myself a secured credit card, which has been the only line of "credit" (backed by my own money...) up until the beginning of this year, when I applied for a mortgage. During the mortgage process they check your score using a model that's significantly different from what free services are using to calculate it, which usually yields much lower result. Mine put me in the "excellent" range, which allowed me to get the lowest possible APR for mortgage. The clerk said that they "like" if the applicant has more than one line of credit, but it won't be an issue in my case.

Getting that mortgage was the only reason I'm playing the "credit score" game. I knew that the day will come when I'll want to buy a house and I researched and prepared myself. I borrowed exactly $0 to get there.

 

[Britsimon]

Well, that’s a slight exaggeration. A couple of credit cards and a car loan (watching the outstanding card balances and a good repayment record of course) and you can get above 650 fairly quickly and above 750 within a few years. It’s not a “perfect” score but it’s good enough for anything you need a decent score for. And for things like car and home loans, if you have a spouse you can both be listed on it so you can both benefit credit-record-wise off one loan. I agree it’s kinda dumb you need to borrow to show what a good credit risk you are, but generally you don’t need much more than you’d do anyway (one credit card for convenience in payments/good reward system, and a second as backup for in case the first gets lost/stolen/blocked etc).

Yep agreed - an overexaggeration.

Right on about what is needed (a couple of credit card accounts). Keeping low utilization and always paying the bill on time will soon have a decent score.

Susie you mention reward cards - exactly right on that too. I get well over $1000/year in rewards from cards which have ZERO annual fee and I pay no interest (because I pay the balance each time. Discover is good for that, and I have a Costco card that is doing VERY well on rebates.

So no need to have 21 accounts or a lot of debt. Just sensible money management.

 

[damo1089]

I got a normal Discover card, not secured, as my first one. I was surprised it was approved. They just started me off with $750 limit.

With the only other things being rent, bills and phones, together with the card, I'm consistently hovering around 750.

 

[Britsimon]

I got a normal Discover card, not secured, as my first one. I was surprised it was approved. They just started me off with $750 limit.

With the only other things being rent, bills and phones, together with the card, I'm consistently hovering around 750.

Discover is one of the easier ones to get in the beginning. Run that for a few months and you will get your credit score up.
Keep paying the card throughout the month to keep the utilization low (as a percentage of the 750). You want to show some utilization at the end of the month, but less that 10 to 20% of overall credit.

 

[damo1089]

Thanks. Yeah. I pay it off whenever I log into the app, trying to keep it as low as I can.

Do you know why using all of your credit limit, providing it's consistently paid off, negatively affects the score? It seems a bit weird to me.

 

[Britsimon]

Thanks. Yeah. I pay it off whenever I log into the app, trying to keep it as low as I can.

Do you know why using all of your credit limit, providing it's consistently paid off, negatively affects the score? It seems a bit weird to me.

Utilization of available credit is ONE factor they look at. It can be seen as a sign of someone getting into trouble. Not significant if you have one card at 750 limit, but becomes much more significant as you build up accounts.

So - if someone has 5 credit cards, each with 10k limits, they have total 50k "available" credit. That is not a rare case at all because credit card companies increase your available credit sometimes without you even asking. In that case the credit companies would want to watch the utilization and a 10% utilization (5k of the 50k) would be "healthy", assuming you were paying that down each month, not increasing. But if they saw the utilization going up to 20%, 30% or higher it could be an early sign that someone is getting into credit difficulties.