How to Build Credit as an International Student in the U.S.

If you’re an international student in the United States, you might feel like you’re in limbo. You’re shaping your future through education, but if you’re not a U.S. citizen, other aspects of your daily life can be difficult. Establishing a credit history is one of them.

Fortunately, there are several ways people can build credit as international students. Here’s a closer look.

How to build credit as an international student in the U.S.

Those looking to build credit as international students can start with one or more of the following strategies.

Getting a secured credit card

Secured credit cards can be a great way to build credit if you have limited or no credit history. 

Here’s how it works: You make a deposit that becomes your credit line. If you miss any payments, the card provider will use your deposit to cover the balance. If you make all payments on time, you’ll eventually receive the deposit back, and the provider might offer an upgrade to a standard credit card.

Getting a student credit card

Student credit cards aren’t secured. Instead, they’re designed for people with little or no credit history. Most come with low limits. If you make payments consistently over time, the provider will likely increase your limit.

Using a credit-builder app

Many credit-builder apps have more lenient approval requirements than credit card providers do. With these apps, you may be granted a small credit line or loan. As you make payments, the app will report them to credit bureaus, helping you increase your score and build credit history.

Kikoff is a credit-builder app that allows you to use your credit line to make purchases in the Kikoff store. We don’t charge interest, and we report your payments regularly to help you build your credit score.

Becoming an authorized user

If you have a relative or close friend with good credit, ask whether they would be open to adding you to their credit card as an authorized user. When you become an authorized user, the cardholder’s account appears on your credit report, helping you build credit.

However, if the account owner uses too much of their available credit or fails to make payments, your credit score could be negatively impacted. Go with this option only if the account owner is someone you trust.

How the U.S. credit system works

Like many countries, the United States has a credit system that assesses each person’s risk and offers this information to lenders. 

These three credit bureaus compile financial data into credit reports:

• Experian
• Equifax
• TransUnion

Credit reports include information on open credit accounts, payment history, and the percentage of available credit a person is currently using (credit utilization). 

The credit bureaus take this information and use it to calculate individual credit scores. That calculation is based on five factors, which are weighted like this:

• Payment History: 35%
• Credit Utilization: 30%
• Length of Credit History: 15%
• Credit Mix: 10%
• Amount of New Credit: 10%

Many online banks and credit-builder services allow you to monitor your credit score. You can also access your credit report at AnnualCreditReport.com.

Can you build credit without a Social Security number?

A Social Security number (SSN) is a unique identifier. You won’t qualify for an SSN with a student visa alone. However, if you have work authorization for a job on campus or off, you can get an SSN. 

Having an SSN will open up more credit-building opportunities. If you don’t qualify for one, you might be able to get an Individual Taxpayer Identification Number (ITIN) instead. You may need an ITIN if you have taxable scholarships or grants, for example. 

Some lenders will accept an ITIN in lieu of an SSN. If you don’t have either, a lender might approve your application for credit if it has another way to verify your identity.

How early should you build credit?

When it comes to building your credit, the length of your credit history matters. That’s why you should start building credit as early as possible. 

How visa statuses affect credit

If you’re an international student in the United States, you probably have one of these types of visas:

• F-1: Academic study
• J-1: Exchange program
• M-1: Nonacademic or vocational training

However, work authorization follows a different process, and the type of student visa can affect whether you will be allowed to get a job. If you are allowed to work while in the United States, you can get an SSN, which will make it easier to build your credit. 

Students without work authorization may need an ITIN if they have other taxable income, like scholarships or grants. Having an SSN or ITIN makes it easier to apply for credit in the United States.

Your visa status may also impact how lenders view your application. If you have a short-term visa, a lender may be hesitant to extend credit. The lender may be concerned that an international student could rack up debt and then leave the country. 

Even if you’re responsible with credit, this viewpoint can affect your ability to get a credit card or loan while in the United States.

Common mistakes to avoid

People attempting to build credit as international students should avoid these common mistakes:

• Applying for too much credit at once
• Missing payments
• Using more than 30% of your available credit
• Only making minimum payments

Each of these mistakes may lower your credit score, making it harder to qualify for new credit (and therefore even harder to build a positive credit history).

Conclusion

For young adults looking to build credit as international students, options can be limited. At Kikoff, we aim to make building your credit simple, fast, and fun. Once you have an SSN or an ITIN, you’re eligible to apply with us. 

If you have any questions about how Kikoff works or how to get started, get in touch today!