US credit score shenanigans

September 15, 2014 2:59 AM

Non-American working in the US for 3 months, then returning to the US a year or two later. I want to use this 2 year gap to build a US credit score. How can I make this work?

Situation:
- I will be in the US for 3 months, working.
- It is highly likely that I'll be returning more permanently in 1-2 years.
- I'd like to take advantage of this and the whole US credit score system.

Plan:
(1) Get credit card somehow while in the US.

(2) Build credit score via:
- Buy ebook on amazon once a month, or buy a US friend some monthly subscription to something. Will this work?
- Possibly change the address to be my (trustworthy relative)'s house in the US for the 1-2 year interim period?

(3) Return to the US and have a credit score.

Possibly relevant:
- E3 visa from Australia.
- Big company with lawyers and HR arranging for visas and housing and things like that - this time.
- US tech industry salary - so proof of income is easy.
- No existing cards with any banks that transfer history to the US - over here we mostly use debit cards.
(I'm not concerned about the whole 'its credit'/temptation thing. Debit cards with a positive balance aren't any less easy to spend money on.)

So, questions:

Firstly, what's the easiest way for me to get said credit card?
- Some kind of secured card is fine - I have the money. Should I be able to get these?
- I'm guessing a store card is out? Given I won't be able to physically visit a store to buy things?
- Is everything either MasterCard or Visa? Or are there other variants to avoid?

Secondly, what am I likely to have trouble with?
- Bank accounts here usually want proof of address and things like that - without a utilities bill, what else might be accepted, if banks there are the same?

Thirdly, what am I missing? Anything else I'm likely to care about?

posted by Ashlyth to Work & Money (7 answers total)

Best answer: You'll probably have to get a secured card. So, for a $500 card, you'll have to deposit $500 into a savings account that you then can't touch. That $500 is your security against a $500 limit credit card.

My advice is to do that and also open a US checking account at the same bank and deposit money into that. Then sign up for some small regular monthly charge like Netflix or Hulu (which you should still be able to access from abroad using the Hola extension) or perhaps a monthly Kindle newspaper or magazine subscription (which will be delivered to your Kindle wherever). Set up your card to be auto-paid in full from your checking account every month and deposit enough money into your checking account to cover the monthly bills for a couple of years.

When you get back you'll have established a couple of years of credit history of very low utilization (which is good) on one card.

If you have enough money to afford it, you could do this 4 times at 4 banks (you only need 1 checking account to auto-pay the 4 bills). IIRC, each additional card up to 4 will contribute positively to your credit score. While opening new accounts makes your credit score take a hit, if you open them all at once on the first trip then by the time you return they won't be new anymore.
posted by Jacqueline at 5:05 AM on September 15, 2014

Best answer: I always say this in questions about credit, but once you have a social security number, sign up for Credit Karma. It's free, and it will give you an approximation of your credit score, and it will pitch you ads for bank and credit products that you are likely to qualify for. You might even qualify for a non-secured card.

In addition to Visa and Mastercard there's also Discover, which is not as widely accepted but is generally more tolerant of lower credit scores. Pretty much all of the online retailers accept Discover, so there's no *disadvantage* to having a Discover card for you. There's also American Express, but they tend, if anything, to be *more* restrictive, and there's no particular benefit for the kind of transactions you would most likely be making.

For the period while you're back in Australia, make sure the bank has a good online system so you can check in regularly. Sign up for every possible "high balance alert" and "upcoming bill" message that you can (on one of my cards, my "high balance alert" number is $5, because I don't use it often and I have a bad habit of forgetting about it). Have the alerts sent to your email. Also, get a US Google Voice number and use that as your contact info - Google will transcribe any voicemails you get and send them to your email. I can't remember the last time I got actual real mail from one of my credit card companies but I'll let someone who has US cards and lives abroad chime in on the best way to make sure you receive actual printed mail.
posted by mskyle at 6:51 AM on September 15, 2014

Don't forget to buy a coffee every three or four months with each card, so they don't cancel them.
posted by Yowser at 8:26 AM on September 15, 2014

My first-and-only credit card was not secured. I don't think secured cards count as much toward establishing credit, at least, that's what a friend of mine said ten years ago.

A store card isn't out necessarily. It is my understanding that a store card will still have a big-name logo, like visa or mastercard.
posted by aniola at 8:33 AM on September 15, 2014

- Big company with lawyers and HR arranging for visas and housing and things like that

When I did this, they also arranged a relocation assistant who took me to a local bank that the company had a relationship with, and they gave me a great credit card with $5k limit. Friends in the same situation who thought they didn't need any help going to the bank were given a secured card and took ages to "qualify" for a real one. This will also help with "what proof of address does the bank want".

- Is everything either MasterCard or Visa? Or are there other variants to avoid?

There also exists Discover and American Express, which are less widely accepted and so probably not worth it for your purposes.
posted by the agents of KAOS at 11:01 AM on September 15, 2014

Best answer: Just as a datapoint my wife is a tenured professor at an American university and we have good credit in Canada and United Kingdom and never miss bills. We still got rejected applying for the Amazon's credit card because we don't have enough American credit history and this is after living here for two years and having, using and regularly paying off an American bank visa.

The time frame for establishing beneficial good credit appears to be longer than I thought (and maybe you are thinking).

You also may not be eligible for mortgages or other loans when you are on a two year renewable visa if that is what are you looking to do with a good credit rating.
posted by srboisvert at 12:39 PM on September 15, 2014

Response by poster: Looks like this might work, then.

Yep, I know I probably won't have the world's best credit score after the 2 years - but it'll help. Mortgages would be a few more years out (they can be approved on E3 visas, possibly with a higher down payment.)
posted by Ashlyth at 6:20 PM on September 15, 2014