Just arrived on H1B work visa to the US and need to build Credit and get a Credit

Hi Credit.com Expert Team,

Here is the situation. I have just arrived to the US on a H1B work visa. I am aware that Credit Rating in the US is a very important thing that impacts several aspects of your life here including Eligility and Rates on Mortgage, APR on Credit Cards, APR on Car Loans, Insurance etc etc.

Since I have just arrived. I have no Credit Record here at all. I have applied for my SSN and have just received my SSN card a few days ago.

Background Info: I am employed with a US company that has over 500 empoyees in the US and have a good annual 6 figure salary.
I have opened a Checking and Savings account with Bank Of America and my Salary gets deposited directly in my checking account.

I have read on this forum that the best way to build credit is by applying or a Secured Credit card and have a few questions in regards to that:

1: Would you know of some banks that issue Secured credit cards and also pays interest on the deposit amount? Suggestions would be helpful. Name a few please if that is OK?

2: Would you know which secured cards or banks have the minimum Annual, Processing fees and charges and are still very good on reporting your payment patterns to Credit Bureaus? I am very good with payments, am a person who does not beleive in living on Credit, but scores in the US are important for many other reasons like Insurance etc.

3: Is it advisable to apply and get 1 or maybe 2 secured credit cards, does that help build credit faster if you have 2 secured credit cards instead of 1?

4: I have read on some post on this forum that you should ideally use 10% of your available credit, my monthly expenses are in the range of $ 400 to $600 that I was intending to use on my credit card to help build my credit? Do you suggest that the moment I have used 10% of my credit limit I switch to paying other expenses in cash and debit and not use the card? This way I am sure that I am not going over the 10% limit… if that helps in building my credit faster?

5: The company that employs me is also giving me an American Express Corporate Green Credit Card for all my official expenses, would that also help build my credit as they did take the SSN when I applied for it. Just an fyi.. the payments on this green AMEX card will be made by the company directly and the billing address is also the company address and not my home address.

6: Is there anything else that I can do to build my credit faster. Example: Co-sign on a car loan with some friend who has good credit history here etc. etc.

7: Is it worth the risk to try and apply for a unsecured credit card to see if I will get approved? May be with Bank of America as I have a Checking and Savings account with them? The reason I ask is: Idelally I do not want to apply and see that it negatively impacts my score as there is a high probability of denial as I do not have any credit history?

8: Is it true that when you make an application for Credit and based on your scores that Credit is granted to you it positively impacts your credit and vice versa if the credit is denied?

I know these are a lot of questions, but your expert help will be much appreciated. I am new here and need I could definately use some expert help to get started in the US.

Thanks again, I look forward to your responses.
KRS

KRS,

Welcome to the U.S!

These are all great questions. Let me try to address them.

First to your overall question, I think a secured card is a great way to go. You can ask Bank of America what they offer since you do have your accounts with them. You can also <a href="http://www.credit.com/products/credit_cards/secure.jsp">shop for a secured card</a> shop for a secured card at Credit.com.

It doesn't hurt to get two secured cards, and it does help to have more than one credit reference. You could also wait until you have several month's payment history under your belt and then try to get a retail credit card as a second card. They are usually fairly easy to get, though even those cards have tightened up some.

4: I have read on some post on this forum that you should ideally use 10% of your available credit, my monthly expenses are in the range of $ 400 to $600 that I was intending to use on my credit card to help build my credit? Do you suggest that the moment I have used 10% of my credit limit I switch to paying other expenses in cash and debit and not use the card? This way I am sure that I am not going over the 10% limit… if that helps in building my credit faster?

Yes it can help to keep your activity on your credit card at 10% or less of the available credit. So if you get a secured card with a $500 limit, don't charge more than $50 a month and pay it in full. You should use the card to keep it active and to help build your credit.

I am leery of cosigning an account because that makes you 100% responsible for the bill if your cosigner doesn't pay. And believe me, I've seen lots of horror stories about cosigning gone wrong.

Your corporate card from work is not likely to appear on your credit report or help your credit.

Is it true that when you make an application for Credit and based on your scores that Credit is granted to you it positively impacts your credit and vice versa if the credit is denied?

No. When you apply for a credit card that creates an inquiry on your credit file. It doesn't matter whether or not you are approved, the inquiry affects your credit scores either way.

If you get a chance to pick up John Ulzheimer's book, You're Nothing But a Number, I believe you'll find it helpful.

Good luck! Feel free to ask any other questions that come up.

Gerri,

Thank you soo much!! These answers so very helpful!! Really appreciate your help!! and I am sure they are helpful for others as well!!

Thanks again! and have a good day!

Regards,
Kunal

Glad it helped. Please come back and let us know how it works for you.

All the best,