Audience: Those expats on contract in the US
Purpose:  To persuade internationals to take small steps to build a credit history upon arrival.

You’ll never need a credit history, right?  Many of our clients believe they won’t.  But plans change, contracts are extended, expats return for a second stay – and three to ten years later, many of those same expats are wishing they had taken this step.  Within the past six months, I have worked with four international executives who discovered that even after several years on US contract, they had not built up any credit history. In one instance, the associate returned on a second contract and wanted to purchase a car and home only to discover that nothing showed up on the credit report from the first three-year contract.

Be smart: take small steps now, build a US credit history, and save yourself money down the road.

The Need for a Credit History

            No good credit history, no good lending rates.   You will normally need a good credit history to get the best rates on the secondary mortgage market.  Your credit history also determines your car loan rate.  Don’t count on substitutes: the mortgage companies normally will not recognize activity from other countries, and lending companies rely on your credit number more than assets. 

Why Expats Fail to Build a Credit History

            From my experience, I would conclude that internationals do not borrow as much as the average American.  Many of our clients never put anything on a credit card, do not borrow for a car, and are not initially purchasing homes during their time in the US. 
Many also believe that their automatic rent and utility payments will prove they are low lending risks.  However, these payments will not show up unless the payee reports them as behind on the payments.

How to build a Credit History

            The first obvious step is to apply for your Social Security number as soon as possible.  Once this is in hand, apply for a small retail credit card.  Some expats use gas cards each time they fill up and then pay off the entire amount each month.  Others get a card from a furniture store or clothing store. Most expats get their initial credit card from their bank along with debit cards.   Try to use the credit card each month instead of always using the debit card.

How to Check your Credit History

          Due to a new federal law, you can check your credit history once a year at no cost.  One good starting point is at the following link:  www.annualcreditreport.com.

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