The countdown starts when you get you SSN. At that point, there is nothing in your credit history at all. No records. Means, there's no "score" that financial institutions can generate based on your credit history.

Plan:

Day 0:

Get a secured credit card. The easiest way to do so is to go to a Credit Union of your choice (go through its reviews online to get a sense on what's the most friendly Credit Union in your area) and apply for a secured credit card with them.

You'll have to put a deposit down in a savings account, and generally the amount of money you deposit will be the CL (credit limit) on your card. For the purpose of building credit, a limit within $200-$500 is enough; although the more it is, the more convenient it is to utilize the card and more beneficial it is for acquiring any future cards. If you can put a $5000 down, that's perfect: the first unsecured card you'll get will likely have a very decent credit limit as well. Just note that you won't get your money back until this card becomes unsecured, and that'll generally happen after 11 statement cuts (rarely, after 5 statement cuts).

If you're planning to apply for mortgage in future, try to find a CU that's known for good mortgage terms. Having a relationship with a CU like that might help you get great rate when you buy a house.

Another option is to apply for a secured card with one of the big banks, such as Capital One or Discover.

Capital One is known for giving you a higher CL than your deposit: it might be $49, $99 or $200 as a deposit for a $200 CL. Chances are, you'll have to put all $200 as a deposit since you have no history, so there's really no advantage. You can find some details here.

The Secured Discover It offer is a lot more interesting because it's a rewards credit card! Means, you get some kind of rewards on using the card, in this case you get cash back for purchases: 1% cash back on every purchase, 2% cash back at restaurants or gas stations on up to $1,000 in combined purchases each quarter. They will also double your earned cash back after 1 year of owning the card! Practically it means you get 2% cash back on all purchases and 4% cash back on restaurants and gas stations. That's actually pretty incredible, even in the world of the "grown-up" cards that you'll be getting when you achieve a great credit score. I'd recommend putting a $1,000 in deposit if you plan to use the card often and collect the cash back; I personally put $1,500 in deposit which let me make purchases such as airline tickets and not exceed the credit limit.

You should stay away from any offers that you have to pay any kinds of fees for. You might get some sketchy offers in the mail for "Credit One" credit cards (their logo look suspiciously similar to Capital One logo, don't get them confused) – and you might even get approved, but it has a hefty annual fee and fees associated with many activities that other banks would never apply a fee to.

At this point, it makes absolutely no sense trying to get a real credit card, or even a store card, or a gas card. Or things like "Paypal Credit" program. With 99% chance they'll get declined and you'll get a hard pull on your credit history that will make it harder for you to get a great credit score in future.

Day 1:

If you need a vehicle, and even if you can buy it outright, I'd highly recommend you getting a loan. You can put 95% down and only get the auto loan on 5%.

You'll likely get approved for an auto loan since you will have the car as collateral or security for the loan (very similar to secured credit cards). So in the unlikely even of defaulting on your loan, the bank can put a lien on your car. Which makes it a lot easier for them to approve you an auto loan even if you have zero credit history. However, the APR will likely be pretty high, that's why I suggest making the downpayment as high as you can, so that the interest is very low.

What about the term of the auto loan? I'd suggest it being anywhere between 2 years and 5 years. The reason of it being at least 2 years if because mortgage underwriters like to see installment loans with length of at least 2 years in good standing to consider the borrower a responsible person.

Don't worry about car dealership putting many hard inquiries on your credit report: for the purpose of FICO they'll be considered one inquiry, as long as they happen within a short period (30 or 60 days period).

Day ~180:

When you have at least 5 statement cuts with you first secured credit card, you can try and get a real, unsecured card. If you also applied for the auto loan and made all payments in time, you're golden!

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What Are Credit Cards Originally For

Credit cards were invented by the financial institutions as a convenient way to provide loans to consumers. You can buy nice, expensive things that you wouldn't be able to buy otherwise. Then you pay it back in your own pace, and the credit card issuer gets their interest collected.

For the purpose of this blog, I'll assume you'll only be buying things you can afford, and be able to pay your balance in full.

How Do Credit Cards Work In The US?

You start with a $0 balance. You don't have a bank account directly connected to the card: there's no "cash balance" that gets deducted when you pay with a credit card.

Every time you make a purchase, you loan money from the financial institution, be it a bank or a credit union. So, if you purchase something a $5 coffee your balance will become -$5, which is generally reflected as something like "current balance $5" in the online bank / mobile bank software.

Every month on a specific day a "statement cut" happens. Meaning, a monthly statement is issued, and it makes a "snapshot" of your balance at that day. So, if you've started with $0 balance and spent $300 within the 30 days before the statement cut day, and haven't made a payment during this period, you'll see the $300 balance on your statement. You can always call your card issuer and ask when the statement cut day is for your card. Usually the first statement cut is ~30-40 days from the date your card was issued or activated, and then it occurs every month on the same day.

The balance on the statement cut is (in 95% cases) exactly the balance that gets reported to the credit bureaus. That's the number you should pay a very close attention to when you're just building your credit history.

For most of credit cards (with the exception of charge cards, which are less common), there is usually a credit limit set on the credit card. With limited or no credit history (or bad credit history), you'll probably not be able to obtain a card with a credit limit of more than $500.

Paying Your Credit Card Balance Off

As you might guess, the balance on your credit card won't go away unless you pay it off. Over the time, if you don't pay your balance off, interest charges will be applied.

You should be making a payment on your balance before the statement cut, so that the balance that gets reported to the credit bureaus is as minimal as possible. Note that keeping a $0 balance on all your cards does not help your credit score, although that might sound illogical: for the purpose of credit scores that would mean you aren't using your credit cards.

You want to make sure there's a 1-10% balance reported. 1-10% balance is calculated relating to your credit limit. If you have one card with a $500 credit limit, you want to have between $5 and $50 on your balance by the statement cut date (and pay it off in full right after that). If you have multiple credit cards, this rule applies to the balance on all your cards together, compared to all credit limits together.

What's The Difference Between a Credit Card and a Debit Card?

• Debit cards deduct the expenses you put on them from your checking account directly.
• With credit cards, you loan money from the financial institutions, and you have to pay it off later (usually from your checking account). Usually, if you don't pay it within a few weeks after the statement cut ("carry balance"), interest will be incurred.

Should I Use a Credit Card or a Debit Card?

You should always use your credit card. Debit cards almost never provide the benefits you could get with credit cards, such as:

• You build a relationship with your credit card issuer (potentially allowing you get better products from them)
• Using a credit card, you build your credit history. With proper usage and paying attention to the balance, credit cards help you build great history very quickly
• With many credit cards, you'll be getting significant rewards, from cashback to airline points; sometimes the points come in very significant amounts as a sign-up bonus

As soon as you are in the US, one of your first activities should be getting an SSN – and then getting your first credit card so that you start working on your credit history. You'll be very thankful to yourself later.

• You are an expat, who moved to the US (along or with family) recently
• You earn more than you spend, you have some savings and "emergency fund", you never have to get into debt (unless it's an auto loan or mortgage). You would be able to pay any credit card balance in full, and you never carry credit card balance.

In order to get a great credit score, you have to be very conscious of your finances. Never get into the game if you feel that when you'll get a credit card with $10,000 limit you'll get into the $10,000 debt.

What's it all about?

Back when I moved to the USA, I know very little about credit history and credit scoring. I couldn't recall the names of the credit bureaus and had no idea what my credit depends on.

I did know, however, that my credit affects my ability to get a great APR on loans and mortgages. And that's pretty much all I knew.

Speaking to other expats, I often find that they, coming to the USA, also have no idea how to build their credit in a proper way and why it's important. I didn't know either, made some mistakes in the very beginning, then started to learn more about the topic and now have a very clear strategy and tactics that would allow me build a very strong credit.

Why Should I Build My Credit History

Whether you want it or not, at some point your credit history will starts being built by itself. But I'd advice to take full control of it, and never get it loose.

Here are some benefits that might come out of having a high credit score:

• You'll be able to get great terms – such as APR (Annual Percentage Rate) – on your auto loan or installment loans.
• You'll be able to get great terms on mortgages. I put it as a separate point here, since even 0.5% in mortgage saves lots, lots of money. Practically, financial institutions would be fighting to get your business.
• You'll be able to get the best credit card deals there are. In this case, it's not just about the APR. If you're financially responsible, you probably won't even care about the APR since you would always PIF (Pay in full). The important benefits of great credits cards are rewards (either cash or airline miles/points) and sign-up bonuses. Essentially, you'll earn money (worth 1% to 10%) whenever you use your credit card.
• The sign-up bonuses mentioned above might actually be huge! One of the best cards, Chase Sapphire Preferred, has a 60,000 points sign-up bonus as soon as you spend $3,000 within first 3 months. And 60,000 points roughly mean a Round-Trip travel to Europe, or a couple of Round-Trip travels within the US.
• You'll never have a problem acquiring a great deal on renting, cable/internet services, etc; minimizing your security deposits all the way down to zero.
• There's more...

So, What Does Credit History Mean?

...

What's a Credit Score?

Credit Score is a number, calculated by a formula that nobody (except people who invented the formula) knows exactly. But ...

Notes:
- Banking relationship helps (Chase): 1, 2, 3, 4, 5 - Pre-qual sites (google research before going forward - chase and capital one are good, discover maybe)

http://loopholetravel.com/

• FICO AAoA includes closed accounts for 10 years after their closing date. That means, if you have to close a credit card, close it (as long as you're good with utilization). Keep your cards if you have to have the credit limit for utilization or if you want to keep the relationship with the bank. If there's no yearly fee, don't close it without a significant reason.

Also this http://www.doctorofcredit.com/an-introduction-to-chexsystems-inc/

And while my interactions with Transunion and Experian weren't exactly hassle-free, Equifax has proven to be the most unfriendly to expats.

So, here's the thing: while everyone who is lawfully admitted to the United States on a temporary basis (as opposed to having a permanent residence - Green Card) are eligible to receive the Social Security Number (SSN), the actual card comes with an interesting note on it:

VALID FOR WORK ONLY WITH DHS AUTHORIZATION

No big deal, right? It's still an SSN, issued by the Social Security Administration, and it's very similar to the one US citizens have, only without some US social security benefits (such as retirement). Well, in my experience, some of creditors would, from time to time, spend some time looking at it and probably ask their manager whether this SSN is eligible for, let's say, applying for a credit card or getting a bank account. But they will always proceed, and they should.

And you're stuck with a card with this note until you receive permanent residency, then you can re-issue it.

Well, Equifax might be the only major important company that doesn't really recognize this kind of SSN as a "real" SSN.

A couple months ago, I've submitted a request for the free Annual Credit Report online, and, after answering a bunch of security questions, got a screen saying that they could not verify my identity and that I have to request the credit report by mail.

Not the great news, but no surprise – I had assumed that my credit history is not long enough for them to be confident in my identity. Went ahead and filled in the paper form – which is not very complicated – and sent it. Within 2-4 weeks, I've had the reports from Transunion and Experian in my mailbox. Equifax, however, didn't send me my credit report right away. Instead, I've got a request from them for additional identification information – which I had to send one more mail to them with, specifically with an ID and SSN. Yes, a copy of the SSN card with the "VALID FOR WORK ONLY WITH DHS AUTHORIZATION" note on it.

3 weeks later, I'm finally getting the credit report from Equifax. Happy ending – or I thought so at first. There was another letter from Equifax same day with a following note:

Be advised that worker ID numbers will not be added to the credit file. This number is not issued by the social Security administration as a social security number.

And in the report itself, the SSN field is empty. It took me a call to Equifax toll-free number to fully understand that my SSN is not associated to my Equifax credit file. It doesn't take a lot of knowledge and imagination to understand that it might lead to some problems, from lenders not being able to pull my report, to lenders not being able to report my loans information to Equifax, directly affecting my credit score.

I'm not alone in this problem. Here are some more people I've found having the same problem:

• https://www.reddit.com/r/personalfinance/comments/37czde/equifax_wont_add_immigrants_ssn_to_file/
• http://www.creditcardskey.com/best-credit-cards/18604-equifax-problem-ss-card-says%22valid-work-only-dhs-authorization%22.html
• http://britishexpats.com/forum/usa-57/equifax-ssn-wording-843727/
• http://www.credit-land.com/research/guides/building-credit-history/ssn-and-credit-cards-135.html
• https://dreamact.info/forum/showthread.php?t=72847
• http://www.avvo.com/legal-answers/equifax-is-refusing-to-provide-credit-report-ssn-p-1533193.html
• More here: https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&es_th=1&ie=UTF-8#q=equifax+%22VALID+FOR+WORK+ONLY+WITH+DHS+AUTHORIZATION%22

The only page where I could find something close enough to being a solution is this one in the comments at the bottom of the page.

Although the issue Leonardo Citro was having is slightly different, apparently, sending the EAD along with SSN might help them recognize the SSN. The only catch is, not everybody might have an EAD – but if you've applied for a Green Card, you should have one.

So, that's what I did. In the envelope, I've enclosed:

• a copy of the letter I received from Equifax with the note mentioned in the beginning of this article;
• a copy of my SSN;
• a copy of my EAD;
• a letter that explains the whole thing and requests them to add my SSN to the file.

On this page you'll find the address to send a mail to Equifax.

For those who don't have an EAD, I'd highly recommend calling Equifax, probably multiple times, and get to a manager who can help resolve the issue.

I'm yet to see the results of the letter – in 3-4 weeks from now, but I'm happy to share the knowledge. Feel free to leave a comment if you're experiencing a similar issue with Equifax.

UPDATE: Unfortunately, Equifax sent me a letter practically saying the same thing they did the last time:

Be advised that worker ID numbers will not be added to the credit file. This number is not issued by the social Security administration as a social security number.

They didn't add my SSN to my file. I'm looking at what else I can do and I'll keep this post updated!