Let’s start off with the basics—banks and financial institutions lend money to consumers based on their financial profiles. In order to generate a personal credit profile, you must have a social security number and one or more credit lines that are being reported on your credit history. In other words, banks want some data on you. You can feed them this data by applying for a secured card. You can apply online or come into a branch near you. We always suggest opening first relationships in a branch, when ever possible. In 2020 there was a significant increase in fraud and banks are more hesitant to open accounts online for those people who don’t have much of a financial profile.Here are the banks we recommend starting off with, as they cater to immigrants and are easier to open an account with:
- Bank of America
- Capital One
We recommend opening 2 or more secured cards if possible. 3 or 4 are better. Why more? Because the more data you provide, the better understanding financial companies have about you and your financial habits.
WHY ARE HARD INQUIRIES IMPORTANT?
After using your secured cards for 4–6 months, you have provided banks enough data. If all payments have been made on time, the banks will approve your application for a credit card. You should never apply for more than 2 credit cards at a time. Inquiries are your bullets. You only have about 6–8 bullets to use per year. If you have too many inquiries, banks will automatically decline your new account requests, so be careful with your inquiries.They are VERY, VERY important. One wrong move could set you back one or even two years. Why two years? Well, inquiries are automatically removed from your credit profile every two years from the initial date of the inquiry.
With credit, it’s important to understand that order matters. It is better to consult with a financial professional. Choose a reputable company by Googling “financial consulting” in any state. Of course, we recommend our analysts at Credit Lifter because of their financial expertise and the variety of business services offered in all 50 states. Credit Lifter has a large number of clients in the real estate and trucking industries and works with both small businesses and consumers to build credit and obtain personal and business loans. We always recommend you shop around and find a company that fits your specific needs.
IMPROVING A NEGATIVE CREDIT HISTORY
Remember, when you apply with banks, they like to see a credit file thatis progressing. In otherwords, a slow upward trajectory—growth. You need to show financial institutions that you pay on time, every time. If you make a mistake at any point or have a credit score that falls below a 670 due to late payments, collections, inquiries, or charged-off debt, you should contact a financial professional immediately. Negative accounts stay on your credit report for 7 years, so it’s important to fix issues quickly. Laws like the Fair Credit Reporting Act and Fair Debt collections Act were designed to protect consumers. By using these laws, credit consultants can remove negative issues from the report, which will increase your scores and allow you to get back on track with your credit. High credit scores mean better and cheaper financial products in the future. Find a reputable credit consulting firm that can assist you.
WHAT SHOULD I START WITH?
Try not to skip steps and jump from a low-tier product like asecured credit card to a high-tier product like a mortgage. It’s too much risk for a bank. Look at your credit report and ask yourself this question every time you apply for any loan. Based on your credit report, would you lend yourself money if you were the bank? Would you lend a person $500 and then immediately lend them $150,000 without seeing ifthey make payments regularly and on time?
Banks will likely not be comfortable lending you a large sum of money if they don’t see a track record. The general order should go like this: Secured Card à Low-Limit Credit Cards ($500–2000) àHigher-Limit Credit Cards ($2,000–5,000) à Personal loan ($5,000–10,000) à Auto Loan ($20,000+) àMortgage($100,000 +).
THE BEST BANKS & CREDIT UNIONS FOR NEWCOMERS
The next step in developing good credit is to use more and more credit products. Banks love to develop relationships and see a mix of products used. Think of them as your networking partners. The more the banks get to know you faster, the better. You want to have long-lasting relationships with the banks so they can see that you’re a trustworthy borrower. Think of banks as your partners. The more you have, the better it is for you.
Which banks should you develop partnerships with first? Our recommendation is to apply with the top 5 banks by asset size firstand then move into the top-2 credit unions.
- JPMorgan Chase Bank
- Bank of America
- Wells Fargo
- US Bank
- Navy Federal
Why is it important to develop a banking relationship with banks that have the most assets? More assets mean more products. The top institutions are getting bigger and bigger every year, sort of like Google and Apple get bigger. If you deal with a large institution, they can typically get you the best products at the best rates because of their size and scale. While smaller banks are convenient and close in proximity, we do not recommend you use them.
Banks typically have a number of divisions and have slightly different lending standards. Some banks are stronger in one region than another. Some banks focus on credit card products,while others may emphasize auto loansor mortgages. However, in general, the top 5 banks will be quite similar to each other in terms of their core businesses and how they apply to consumer financial products. So try to develop a relationship with each of them. We also highly recommend you use the integrated features built into the top banks and credit unions.
You should register and have an online login for every banking relationship. This helps keep control over your payments. Autopay prevents late payments, which can severely damage your credit report. One 30-day late payment can hurt you by 30–50 points. Once auto-pay is set up, it’s easy to focus on other more important things.
Zelle is a widely used system to send money without paying any fees. It’s very convenient and provides seamless ways to send money online from bank to bank. You can use this system to send money to yourself and also send money to people you know for goods and services. There are absolutely no transaction fees. We recommend you do a test payment of $1 to make sure the other side has received the payment. Then you can send the rest. New users will have weekly limits of $500 or $1,000. The more you use this system, the fewer limits you will have.
HOW MANY CHECKING ACCOUNTS DO I NEED?
Another common question immigrant may have is, “How many checking accounts should I have?”The checking system is completely different than the credit system discussed above and does not influence CREDIT decisions. However, if you are in business or planning to open one in the future, we recommend you open up a checking account with 3 or more major banks and or credit unions. Checking is a gateway into the banks. Banks can see how much revenue you generate by having access to your checking accounts. The more money you generate,the more the banks will appreciate you and extend more products to you. Remember,banks want you to deposit money so they can lend it to other customers. That’s how they generate their income.
Understanding credit reporting and banking requirements is critical for any and all immigrants alike. Unfortunately, everyone who arrives in the United States will start at point zero. To date, there are no integrated credit bureaus that allow you to transfer credit data from your home country to an equivalent in the United States. That’s why Credit Lifter has designed special programs to develop immigrant credit much faster than would be possible otherwise. Not only do we fix and build your personal credit, but we will also show you how to set up and build your business credit.
HOW TO CHECK A CREDIT REPORT FOR FREE AND GET PROFESSIONAL ADVICE IN YOUR STATE?
The first step in our process at Credit Lifter is checking your credit reports. If we can’t see the credit report, how can we advise you on the next steps? It’s not possible. Every credit report is unique and needs to have a customized plan. When we see a credit report, it tells us a story.
We can see what happened, when it happened, and how it happened.If you need to check your report, you can click on the link below, and it will cost you $1 to register for a 7 day trial.
If you’re thinking there is a catch here, there really isn’t. You can register, download the report, and send it to Credit Lifter analysts for a FREE review. You can also provide us your login and password information, and we can check your report online. Our analysts will quote you a price based on severity of the file, and provide a time frame and a detailed recovery plan. If you don’t like what you hear, you can cancel right away, and your credit card will only be charged $1 for this entire process.
At Credit Lifter, we believe in helping people, so we offer a FREE credit analysis. Even if you don’t work with us, you will get exposure to our analysts, who will provide you a wealth of knowledge. We not only help you fix and build credit but also advise you on mortgages, loans, banking, auto loans, business credit, and even investments. Our customers know that Credit Lifter stands for 3 things, reliability, quality and most importantly superior financial market experience. To book a consultation with a Credit Lifter analyst, visit www.creditlifter.com or call 1-888-696-5108.