Think for a moment about the greatness of a system where a salesperson who did not know you one hour ago is able to give you an item (like a car, a refrigerator, a washer/dryer) worth several thousand dollars, just with your ID and your credit history.
One of the points emphasized by acquaintances when discussions start about immigration and its difficulties, is the fact that you don’t have the “famous” credit history; how “if you don’t have a credit history it is difficult or quite impossible to obtain the benefits of a market-economy CREDIT, and that the system is going to devour you for that”.
This article is basically for people who immigrate to countries were market economies are in place, the so called Neo-Liberal economies.
Please try to remember what used to happen in your country of origin when you wanted to buy a new car, an appliance, or a new house. In my case, when I wanted to buy a new car, I had to start by begging the dealer, or look for a friend who had a friend that knew a car dealer, to inscribe me in a waiting list for new car buyers. Once I was on that list, the delivery date was around 2 to 3 months. I was also asked to deposit part of the car’s value up front. On the meantime, I also had to sweeten the dealer’s appetite with presents. I had no say on anything except the make of the car. That car always came in a color I hated and with accessories I never used. But here, in this market society, with an established credit history, my biggest problem is which model I want, what color and what accessories I need, and at the end all I need is the amount of money I am willing to pay out of pocket. 2 or 3 hours after I arrive to the dealership I leave with the car I wanted.
Obviously it took me some time to obtain this status, but it was not such a big deal. You need to think how the system functions, and start working to obtain the status. The beauty of it is that everybody can obtain it. At the end, it is a comfortable, practical system and you don’t own anybody any favors. You just owe it to yourself.
Obviously when you arrive you don’t know the system, so you have to accustom yourself to the idea and then work to be included in it. It depends entirely on you and in your ability to decide how far you want to go to establish your credit. Of course, as an immigrant, you are behind vis a vis the local people, who can start building their credit after they obtain their first check, and that can be right after High School.
Practical points:
-The moment you decide to immigrate start building that credit. Accept credit cards that are offered to you, even with small amounts of credit, like for example, the ones offered by gas stations.
-Do not get too many credit cards; this can be detrimental to your credit history.
-Debit cards do not build credit history, nor do credit cards assigned to your bank accounts.
-If you have a property, no matter how small, get a mortgage even if you don’t need it.
-Buy regularly, not impulsively; the amount of credit should grow, but not in “hiccups”.
-Pay on time you debts, if you do not have enough money, pay the minimum payments, but always pay.
-You have to avoid past due statements .If for some reason the payment arrived late, call the company and explain it. They are helpful, especially with clients who proactively confront their difficulties and look for solutions.
-Don’t overextend in your credit.
Images: Andres Rueda
