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SimonBelgium

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About SimonBelgium

  • Rank
    Member
  • Birthday 03/25/1976
  • Member # 153387
  • Location Irvine, California, USA

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  • Gender
    Male
  • City
    Irvine
  • State
    California

Immigration Info

  • Immigration Status
    Naturalization (pending)
  • Place benefits filed at
    National Benefits Center
  • Local Office
    Santa Ana CA
  • Country
    Belgium

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  1. Make sure you carry less than 30% on each card. Ideally, less than 10% There are a number of factors that make up your score, see the first post in this thread. The most important one is payment history. But one card won't do it. Your score may be good, but lenders won't touch you, because you have no portfolio of credit, nor do you have a long history. So you want to make sure you open several accounts (2-3 credit cards, a car loan, a mortgage, maybe a personal loan, student loan, etc etc) to build a portfolio, and then just wait to build history. Under 2 years, most lenders won't like you much, but building a personal relationship with the senior loan person at your local bank or credit union, can do wonders.
  2. 1. Do it today, and open more than 1 if you can. Try opening up another line of credit as well, if possible. You need a diverse spread of lines of credit 2.1 There are rumors this will change, but I believe it's still a good option today, so do it now. 2.2 Depends on the financial institution I suppose. You should be fine if you're an LPR. With just one year of credit history, buying a home could be an issue. But as you'd be buying with your spouse, her credit history will help out a lot for the "age of credit".
  3. Getting your SSN and Driver's license may take a few weeks, so keep a close eye out so you know what to do when and where. I think you can go to the Social Security Office in your area with the stamped I-551 in your passport within 48h after arrival, to apply for SSN. Once you have that, you can get your driver's license (study for the test!), but you can also get an ID card, which may be faster (I did that). Once you have that, open a bank account and get a secured credit card. Whichever $ amount you can spare, $500 or so is enough if need be. That would be your first line of credit. You can also get a secured personal loan. For instance, deposit $2,000, and you get a $2,000 loan against it. You basically get your money back right away, but you pay off the secured deposit. You need to keep that loan for at least a year to be safe. So you could make it 12 installments or more, doesn't matter. That's your 2nd line of credit pretty much right away. Usually, after a few months, you'll start to get pre-approval letters in the mail. Be selective, but it's OK to get a card with some benefits you'd actually use regularly. Don't open too many! A recent change allows you to report other types of revolving credit as well. Mostly utility bills or rent. They have to be in your name though! If you're buying a car, it can be tough with no credit history. My local credit union did finance my first car here, but being able to go in and talk to an actual person to explain your situation, helps a lot. Big bank lenders won't touch you without a decent credit report. To rent a place, they basically want to see your credit history is clean. No late payments, bankruptcy etc. Often, landlords want to see high credit scores, but an extra month's rent as a security deposit usually helps. If you go to an apartment complex, they are usually easier to work with, compared to individual landlords renting out a house. $5,000 is NOT a lot of money. As soon as you have an SSN, go find a small job locally. The $5K will likely be barely enough to get your rent sorted once you move. So save up, because you'll need a car, insurance for car and house, rent, security deposits (also with little credit history, utility companies may ask for a security deposit), health insurance, food, gas, moving to Houston, etc... When you have a job, usually after 2 paychecks, you can use that to show income, which can help you with loan applications and rental applications. Don't forget to file your change of address when you do move out of your friend's place. You can transfer money from your foreign account into your new US account using Transferwise, link is in my signature below. Don't forget to keep credit card utilization below 30% of available credit, but ideally between 1 and 10%. In short, 2 lines of credit can happen quick. Whenever you buy a car, finance at least part of it and make sure the lender reports into the credit bureaus (Some of the "No credit, bad credit, everyone is approved" places don't report loans). When the pre-approvals come in, pick one that will give you a benefit you use often, for example Costco if you shop there regularly. PayPal is actually a pretty good one to get as well (PayPal Credit and/or PayPal MasterCard), but again, wait a few months. Use CreditKarma to start tracking your credit score. It will appear high pretty much right away, but it will drop once you get real credit on there. Over time, it will go back up to over 700.
  4. I guess they want lots of new citizens for the upcoming elections 🙂
  5. Thanks, It seems processing times for N-400 at the Santa Ana office is 12.5 - 15.5 months... 🙁
  6. Just filed today (DEC 26), online 🙂 Now let the wait begin... How do I know which center will process my N-400?
  7. Open your own CC as soon as possible. Then add more cards over time, but do it at a time where you're fairly certain you won't need to open another line of credit for 3-4 months (such as mortgage, car loan, ...). If you're planning to get a car, finance it (even if you can pay it in cash), just to get the line of credit on your report. Let it report in for 6-8 months, then you can liquidate it if you like. You don't have to finance the whole purchase amount either, by the way, you likely get a better rate if you put 50% cash down and only finance 50% of the car, for example. I think with "lower" credit, most lenders will give you a break on the rate when you put down more than 30% in cash.
  8. Yes, the US credit system is beyond stupid. Checking account is the same as a debit account. Typically, there is 0.0% interest on those, so just keep a minimal amount of money on there. Savings account is where you can get some interest, but you can only transfer money out of it a certain number of times per month (I think it's 5 transfers out) The minimum you want to keep accounts open, is 6 reporting periods on your credit report. To be safe, that's 8 months after you've opened the loan, so pay it for 9 at least, then you can pay it off. For credit cards, NEVER close those accounts, especially not your oldest one. You can pay anything you want on your credit card. Use between 1 and 30%. So if your electricity bill is $100 a month, and they accept credit card payments, use that. 30% of $1000 is $300, by the way. Over time, you'll want to open more credit lines. If you want to buy a house at some point, you'll need a strong credit history. There are lots of small tips and tricks in this thread, so look around and use them as you can. For some lines of credit (loans, mortgage, etc) you may need prior history to build up to a certain value. e.g. for a car loan, you may need to start with a $10,000 loan before the bank will give you a $25,000 loan for your next car. You do not need to stay with the same bank for all your credit lines. Avoid using credit cards linked to a store, unless it comes with a specific benefit to you, such as extra discount, or loyalty credits at that store you are sure to use a lot. Popular good choices are airlines (research which airline one you'd most likely use), and then use that card to get free airmiles, so you can fly back to Europe in Business Class for "free". You need to keep a clean credit history forever. If you miss a payment or are evicted from your rental home, it stays on your credit file for at least 7 years, and will make your life very hard. But on the other hand, a diligent use of your credit will raise your score, and you'll get very good rates for when you do need credit, e.g. to buy a car or a home. The rates may be so good that it's even cheaper than paying cash (inflation and savings account interest). You only need one secured loan. After 6-7 months or so, you should see a nice increase in your score. Perhaps you want to buy a new TV or washer/dryer, so use the 0% interest some stores have to buy it. That's another loan on your report that will increase your score over time. Little formal disclaimer though: I am not a tax advisor nor financial expert, my suggestions here stem from personal research and experience, and should in no shape or form be construed as being applicable to your situation etc etc etc. Seek professional help to get the most accurate information for your personal situation.
  9. Practically: Go to a bank or Credit Union (CU's usually have better rates) and open a checking account and savings account. You'll typically get a debit card and checks. Use TransferWise (https://transferwise.com/u/b6f15) to transfer money to your new US account. Then use some of that money to get a "secured credit card". They'll take your money, put it in a blocked account, and use it as collateral against the credit they grant you on that credit card. Make sure to use the card monthly, between 1 and 30%, for optimal results. I also opened a personal loan using the same principle. Secured Loan. You put some of your savings in an account, they block it as collateral against your loan, and you pay off the loan. You're pretty much just paying the bank interest, but it's a great way to build credit. Say you put $5000 in a loan like that, you get $5000 back right away, and as you pay off the loan over the next year or 2, you get your original $5000 back as you pay off the principal. Yes, get a debit card. Several utilities providers only accept debit, ARCO gas stations only accept debit cards, and so on. If you're near a Target grocery store, and like their offering, you can get a Target RedCard (Debit card) and get 5% off. Please note, you may not be able to open accounts in the US until you have your US Driver's license (or at least an ID card). So when you arrive stateside, go to your local Social Security Office, and when you have your SSN, go to the DMV to get an ID card (fastest) or schedule a driving test for your driver's license (you should study for that, lots of little things are different from EU). You'll need a state-issued ID card with SSN to open a bank account in most cases, and for sure, to have them report into your credit report (which is based on SSN). SSN = Social Security Number
  10. Open a few lines of credit for sure. You need a good mix, plus average age of accounts is important. With your partner's older record (you should be on the oldest accounts), yours should look a lot better really soon!
  11. To answer your main question, wether you NEED to build credit? YES YES YES YES YES ! Everything here works on that dumb credit score. Want to lease a house? You need good credit. Want a job? Let's check your credit report. Want to get a license for something? Credit score OK? Even getting your utilities connected requires a good credit score, or you'll pay through your nose to get that done. So yes, get several lines of credit, and then use your good habits to pay everything on time, and you'll lead a comfortable life, and will have access to loans if you ever DO need it.
  12. Introduction Seeing how building a credit score is one of the biggest hurdles for an immigrant to tackle, and every now and then you see a topic pop up with a question about things like credit cards, buying a car and so on, I thought it would be a good idea to have a single topic to gather all tips and tricks in a single thread. In time, maybe we can incorporate this info into one of VJ's Guides... What is Credit Score The US Credit Score is a number between 300 and 850, which reflects your ability to handle credit. The official score is often referred to as FICO (Fair, Isaac & Company) There are 5 items that contribute to your score, each with a different weight: Payment History (35%): Any history of bankruptcy, liens, judgments, settlements, charge offs, repossessions, foreclosures, and late payments drops your score. Revolving Debt (30%): The amount borrowed versus available credit. Think Credit Cards. Length of Credit History (15%): Both the average time of accounts, as well as the age of the oldest account. These must be ACTIVE accounts. Types of Credit (10%): installment, revolving, consumer finance, mortgage. If you handle more than 1 type of credit, this is good. Inquiries and New Debt (10%): When making an inquiry for credit, such as credit card applications, shopping for a loan etc, your rating goes down. Why is this good or bad as a new immigrant As an immigrant you do not have a history in the US. This means you DO NOT HAVE a US credit rating when you arrive. The positive thing is that you also do not have any BAD payment history. The bad thing is, credit is a catch-22 problem in the US: You can't get credit without a good credit score, and you can't get a good credit score without having and using credit. Any cards, accounts or history you have or had abroad do not count. (One known exception, see below) What credit score ranges are there Excellent credit score: 720 and Up Good credit score: 680 to 719 Average credit score: 620 to 679 Poor credit score: 580 to 619 Bad credit score: 500 to 579 Miserable credit score: Less than 500 How to get credit so you have items reporting into your credit score A lot depends on your personal situation. Are you married, employed, do you have cash to open an account, and so on. Typically, you will need to find a bank or credit union first, so ask around. Once you have found a suitable financial institution, ask for a "Secured Credit Card". This is a card with a certain spending limit, which amount you secure through the financial institution by depositing the cash equivalent on a locked account. You can then use the assigned credit, and after the first month's statement is due, you will have items reporting into your credit score. You now have payment history, length of credit and revolving debt. Usually, your bank will replace the secured credit card with a regular credit card, increasing the limit on the card. Expect this after a few months, if you pay your statements on time. People coming in through a work visa can often get a company credit card, which makes life a lot easier! If your spouse has a good credit rating, the financial institution might also allow him/her to co-sign the credit card application. Check with the financial institution on the requirements they have. In theory any person (in the US) with good credit can co-sign, so a family friend, parents etc are fine too. How to get from decent to excellent credit OK, now that we have some things reporting into our credit score, how can we boost that score up? 1. The number one rule: PAY EVERYTHING ON TIME, IN FULL 2. Specifically to credit cards, the use of credit is important, more specifically, how much do you charge to your card: Per account, avoid exceeding 33% of assigned credit. Some people say it's best to have a utilization of 12-20% (Some say between 1 and 20%) The utilization is based on the amount due on the reporting date. If you buy a 900$ television on a 1000$ credit, but deposit 700$ before the reporting date, your utilization is only 200$, or 20% (Can anyone confirm?) Do not leave credit cards unused (When not using credit, this hurts your score). If you have a 500$ secured card, you could for instance use it to put fuel in your car every week or so. Do not close old credit cards, this hurts your account age! 3. Diversify. Get at least one credit card and one installment loan. You can get a secured installment loan through your financial institution. If you want to buy a TV for 1000$, but that 1000$ in a secured account at the bank, and have them give you a loan over 12 months against that deposit. Another option, typically when buying a car, is to get a car from a dealer who gives credit to "anyone". But ALWAYS ask if they report to the credit agencies (CRAs). Then pay the remainder of the loan after at least SIX months. The intrest rate will be ridiculous (over 20% in most cases). According to Equifax, having at least 4 (different) lines of credit are required to get a really good score (Credit Card, Mortgage, Car Payment, Student Loans, Personal Loans, Home Equity Loan for Credit, ...) My credit union actually suggested the following: a) Get a "personal secured loan" to buy a car. (basically: Put the money you would pay as a cash downpayment on a car, into a secured loan for yourself) b) After 90d of employment, you qualify for a "first time borrower" loan. Bring in the title to the car, and you can use the title to borrow against. You'd get a mediocre intrest rate (C-level credit). This would give you 3 lines of credit after about 4 months, which is pretty good ! Age of Credit Accounts Even if you have a decent credit score after a few months, when the time comes you want to buy your first car, you might get rejected quite a bit on your loan, due to "no sufficient credit history". Although the average age of accounts only counts for 15% of the credit score algorithm, financial institutions will count this as one of the major factors for credit decisions. The solution is to get a large downpayment, and preferably work with the financial institution directly, not through a dealer. Credit Reporting Agencies There are 3 major CRAs in the US: TransUnion (http://www.transunion.com) Equifax (http://www.equifax.com) Experian (http://www.experian.com) They all have minor differences in how they calculate your credit score. By law, they are (each) required to give you one free credit report per year. What can affect your score negatively? (From TransUnion) Wondering when judgments and bankruptcies will no longer appear on your credit reports? Check the dates on records in your credit report. Generally, here's how long judgments and bankruptcies remain on a credit report: Bankruptcy Generally, Chapter 7, 11 and 13 bankruptcies appear as public record items on your credit report for up to 10 years after filing. Chapter 13 bankruptcy records are sometimes taken off sooner, 7 years after filing, depending on the credit reporting company’s policy. When you receive an Order of Discharge in bankruptcy, your creditors should mark those accounts that were discharged as "Included in Bankruptcy" and they will stay on your report for up to 7 years. Charge-off accounts Generally, if a delinquent account is charged-off, the charge-off record appears on your credit report for up to 7 years. Closed accounts Generally, negative or derogatory information about delinquent accounts remain on your credit reports for up to 7 years. Positive closed accounts (without late payments or other delinquencies) may appear for longer than 7 years. Collection accounts Generally, accounts sent to collections will be listed on your credit report for up to 7 years, beginning 181 days from the most recent delinquent period before the collection activity. A collection account’s status should change to "paid collection" once you've paid off the entire amount. If you settle with the collection agency for less, your credit report may list the account as "settled for less than full balance." Inquiries When a creditor or lender checks your credit in connection with an application, you'll usually see a "hard inquiry" on your credit report. Generally, these stay on your report for as long as two years, and may lower your credit score slightly. When a creditor reviews the credit report of an existing customer, or when you access your own data online, a "soft inquiry" typically shows up on your credit report. Soft inquiries don't lower your credit score or appear to businesses checking your credit. Judgments Generally, most court judgments, including small claims, civil and child support, stay on your credit reports for up to 7 years from the date they were filed. Late payments Generally, if you make a payment late, the delinquency could appear on your credit report for up to 7 years. Tax liens Under federal law, city, county, state and federal tax liens could stay on your report indefinitely. Generally, after the lien is paid, the record of it stays on your credit reports for up to 7 years from the payment date. One of the most important of these are the inquiries. If you want to get store credit or a new credit card, DO NOT JUST APPLY for one. Every time you apply for credit, your score will drop a few points, and the inquiry itself (Often referred to as "hard inquiry) stays on your report. Lenders who see systematic hard inquiries on a report see this as negative. However, when shopping for a car (and thus car loans), all hard inquiries within 14 days are reported as one. When buying a house and a mortgage, they are grouped into one for 30 days. Major Tip: VISA and MasterCard are basically payment PLATFORMS, where local financial institutions issue the credit through the platform. Your credit history and account reside with that financial institution. American Express (AMEX) however, issues the credit itself (Sometimes through local companies, but the credit file is shared with Amex --> This appears NOT to be the case: If cards in your country are not issued by American Express directly (Global Network Cards), they cannot be transferred.). If you have an Amex abroad, and have had it for more than 12 months, you can (in most cases) request a US Amex card to replace your foreign card. The advantage is, with a good foreign history, chances of approval are very high, plus, the age of your account goes back to the first issuance of your Amex card abroad ! https://www.americanexpress.com/global-card-transfers/united-states.html Transferring Funds to the USA: Another point to remember is that transferring your foreign money to your new US account (for instance, to get your secured loan or secured credit card) can be a costly affair. Banks have 2 areas to make money off you: Transfer fee: Usually a flat fee or a fixed percentage. This is the fee that is generally quite visible. Exchange Rate: The exchange rate your bank will use is quite different from the real exchange rate on the market. For example, the exchange rate between the EURO and the US DOLLAR might be 1.330 on the market, but your bank might only offer you 1.290. That is a 3% difference you might not see ! After doing some research, I settled on TransferWise. (https://transferwise.com/u/b6f15). This seems to be the best platform so far for people in Europe (incl. the UK) to send money to the US. (Or from UK -> EU and vice versa). It takes a few days longer than most bank transfers, but other than that, I have found it faultless and easy to use. The people behind TransferWise are those that built Skype. Little disclaimer: The URL provided (https://transferwise.com/u/b6f15) is linked to my account and will allow me to accumulate friend referral benefits. There are other platforms that outperform high-street banks and Paypal, please feel free to comment below to add your experiences (and from where to where you sent the money). I would find it useful to add information on how to send money from Non-EU countries, and also how to send money to the foreign spouse / fiancee. Reading Tips: http://www.myfico.com/CreditEducation/articles/ http://www.freescore.com/good-bad-credit-score-range.aspx
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