If you got this far, you are most likely interested in obtaining truthful information about loans for foreigners in the United States. If so, you should know that in the complex financial fabric of the United States, credit history plays a fundamental role. We share with you the detailed interview we conducted with QKapital experts, who delve into this topic. Check it out:
As you’ve seen, for foreigners, establishing credit history in the United States can be challenging. In this article, we’ll explore the importance of credit in American life and the common obstacles faced by those seeking a loan in the country.
The Basics of U.S. Foreign Loans
Before you move forward with reading this article, you should familiarize yourself with three terms that will be fundamental to understanding and navigating the world of loans for foreigners and residents in the United States.
- Credit history
Your credit history is information collected through your credit activity and current credit standing. Credit history records, for example, whether you’ve had bills to pay and whether you’ve paid them on time. That information is what appears on your credit report.
- Credit Report
A credit report is a document that summarizes your credit history. There you can review your credit reports through credit reporting companies such as Equifax, Experian, and TransUnion, among others.
- Credit score
Banks, credit card companies, and other companies use credit scores to make decisions such as offering you a mortgage loan. Credit scores predict how likely you are to repay the money you borrow on time and is based on the information contained in your credit reports.
Why it’s important to have a credit history in the United States
Credit history in the United States is not simply a figure on a report; it is a key that opens financial doors for you. From getting a credit card or renting a car to buying a home, a strong credit history is essential.
According to a report by the National Association of Realtors, 78% of home purchases in the United States during 2023 involve some type of financing, highlighting the need for a solid credit history when looking to acquire a property.
Not only will this history make day-to-day transactions easier for you, but it can also influence the interest rate you’re offered when applying for a loan. Thus, a good credit history will not only give you access to more opportunities, but also to more favorable conditions.
There are nonprofit credit counselors trained by the U.S. Department of Housing and Urban Development. They often offer free credit reports and scores. We suggest you consult them because they will also help you review it. You can also view and request your credit reports weekly, at no cost to you, at www.annualcreditreport.com.
Common Obstacles for Foreigners in Obtaining Credit
The absence of credit history in the United States and the lack of international credit information are two main barriers faced by foreigners.
A lack of credit history can result in denial of loan or credit card applications, significantly limiting your financial options. In addition, the lack of international credit information makes it difficult to transfer credit histories established in other countries. This creates a scenario in which foreigners must start from scratch, facing distrust from financial institutions.
Fortunately, at Interlink FBC we know different ways to obtain loans for foreigners in the United States. Contact us to find out which one is right for you.
Transfer of credit history
If you have a credit history in your country, transfer it to the United States. The transfer of credit history involves not only recognizing the existence of the history in your country of origin, but also validating its authenticity and relevance in the new context. Keep in mind that U.S. credit bureaus need to understand and process this international information effectively. For this reason, the process can be complicated and sometimes requires additional documentation to support the validity of the information, but it is not impossible.
Starting your credit history from scratch
To overcome initial hurdles, it’s critical to adopt practical strategies to build a credit history from scratch. Some of them are:
- Secured credit cards – Getting a secured credit card is a recommended initial step. This type of card requires that the line of credit you get is equal to the security deposit you put in yourself.
- Credit builder loans – Some financial institutions offer loans specifically designed for those who don’t have a credit history. Banks and credit unions usually deposit the loan amount into a savings account from which you won’t be able to withdraw the money immediately. You pay the money back in small payments over a short period of time, and in the end you receive the full amount you paid. This is an effective way to build a positive credit history.
- Retail credit cards – These are credit cards offered by stores, warehouses, gas stations, and other types of businesses that sell goods and services. They tend to have higher interest rates, but they are a valuable tool for building credit. It is essential to use them responsibly. Keeping a low balance, making payments on time, and avoiding unnecessary expenses are key practices. These cards can be a stepping stone to building a strong credit history.
With these options, you can show that you can manage your credit well and that you can pay your bills on time. Now, let me tell you, that’s not all. Whichever path you choose to build your credit history, there are a number of documents you’ll need to submit:
- A valid visa: E-2, EB-5, L-1 , or other.
- Your valid Social Security Number .
- Employment authorization documentation.
- Proof of employment history.
- Your credit history.
- Proof of income.
This documentation is necessary to prove to the lender that you can repay the loan requested.
Credit for Aliens Without SSN
At Interlink FBC, we understand that getting a loan for foreigners without a Social Security Number (SSN) can be challenging, but don’t worry, here are three ways to do it without losing hope:
- Get a guarantor:
Don’t have SSN? No problem. You can add a friend or family member as a guarantor in your application. This financial hero is committed to ensuring that all payments, including interest, are made on time. This decreases the risk for the lender and increases your chances of getting the loan. So, find someone you trust with a good credit history who can back you up.
- Find lenders that accept an ITIN number:
We know that most lenders ask for an SSN, but don’t worry. Some well-known financial institutions are open to alternatives. An IRS-issued Individual Taxpayer Identification Number (ITIN) can be your ace up your sleeve. This number assures the lender that you are a taxpayer and able to repay the loan. Keep your head up, there are options for you!
- Apply for a loan from immigrant institutions:
With the growth of the immigrant population, companies have emerged that are specially designed to help those like you who are looking for loans for foreigners. These companies understand your needs and don’t typically require a high credit score and, in some cases, no guarantor either. Although it may seem difficult, there are ways to reach your financial goals without an SSN.
Get your mortgage loan for foreigners in the United States
We’ve explored the key steps to establishing and improving credit history in the United States. As always, at Interlink FBC, we encourage you to take proactive measures, providing you with the tools and knowledge necessary to successfully navigate the world of credit in a foreign country.
Although we do not provide direct advice on applying for loans, we are in a position to refer you to professionals who specialize in this service. Contact our team now.
Remember, beyond the first steps, it is necessary to adopt long-term strategies to improve your credit score and thus obtain credit in the United States as a foreigner. Consistency in these actions over time will contribute to the strength of your credit history, you’ll see.
With patience and diligence, the path to healthy credit is within everyone’s reach.
