When Helen Dale emigrated from England to the United States, she opened up a business of her own. A seasoned hair stylist, she built a solid reputation and a loyal clientele at her salon.
Despite being a legal permanent resident in the U.S., she often feels like she’s operating a business with her hands tied behind her back. Thanks to regulations, she has limited credit options because she doesn’t have a Social Security number (SSN).
“My bank has a rule that says you must be a citizen to get a credit card, no matter how high your credit score is,” she said. “Without a credit card or a line of credit, it’s more difficult to buy new equipment or build up my business.”
Dale’s situation isn’t unusual. According to the Migration Policy Institute, over 1.1 million people legally immigrate to the U.S. each year. Those immigrants can face big financial hurdles, even though they do everything by the book.
Getting a credit card without a SSN or U.S. credit history can be difficult, but thankfully, it’s not impossible.
A lack of credit history leads to problems
According to the Consumer Financial Protection Bureau, credit reporting agencies can’t create a credit profile on new immigrants because there’s not enough information about the person’s financial behavior in the U.S.
“Most credit card companies deny me due to a low credit rating because I don’t have any credit history,” Dale said.
Even if they have accounts in good standing in their home countries, that data doesn’t transfer over. Immigrants in the U.S. who are starting from scratch face a conundrum: They can’t get credit without a credit history, but they can’t build their credit history without getting credit.
That issue can put people into a tough spot. For entrepreneurs like Dale, lack of credit options makes it difficult to grow their businesses. Even for those who don’t own their own companies, not having a credit card can make it hard to pay bills.
5 ways to get a credit card without a SSN
Can a non-U.S. citizen get a credit card? Thankfully, the answer is yes. It might take some extra homework and research, but it can be done. Use these five strategies to get a credit card:
1. Find a cosigner
Some credit card companies allow you to add a cosigner to your application. This person acts as a guarantor for the debt. A good cosigner — typically a relative or trusted friend — has a strong credit history, and must cover the payments if you fall behind.
A cosigner reduces the credit card company’s risk of you missing payments, so they might be more likely to issue you a card. If you have a relative with a strong U.S. credit history, consider asking them to cosign your credit card.
2. Become an authorized user
Similarly, another way to build your credit is to become an authorized user on another person’s account. You can use the card and make payments, and your activity is added to your credit report — which helps you build a positive credit history.
However, adding someone as an authorized user is a big decision. The original cardholder is responsible for making payments even if the authorized user makes purchases the cardholder didn’t approve. Make sure you both understand what charges are allowed and how you will repay them.
3. Utilize secured credit cards
A secured credit card can be a stepping stone to a regular credit card. With a secured card, you make a deposit to your account and that amount acts as your credit limit.
For example, if you deposit $500, you can charge up to $500 worth of purchases before you hit your limit. After that, you can’t make any more purchases until you make a payment.
Secured cards don’t give you the same buying power as a regular credit card, but using one can help you build your credit history and qualify for another card in the future.
4. Look at credit card companies designed for immigrants
As immigration numbers continue to increase, some companies are offering options specifically created just for immigrants. These companies have lower credit score requirements and might not require a cosigner, increasing your chances of getting approved for a credit card. Two companies to look at are Deserve and CreditStacks.
Deserve offers several different cards that are designed for those with little to no credit history, including recent immigrants. The Deserve Edu card — an international student credit card — doesn’t even require a SSN. The interest rates are higher than some other cards and there is an annual fee, but if you pay off your balance in full each month, a Deserve credit card can be a great starter card.
CreditStacks was founded by a U.S. immigrant who struggled with finding a credit card himself. The company offers a credit card for new immigrants, which come with a higher credit limit than many entry-level cards and do not require a SSN.
5. Ask if the credit card issuer will accept an Individual Taxpayer Identification Number
Although some credit card companies ask for a SSN, many financial institutions, including banks and credit unions, will accept alternative forms of identification. One of the most common types is an Individual Taxpayer Identification Number (ITIN), a number the IRS issues to nonresident and resident immigrants.
Making the most of your new credit card
Whether you have no credit history or can’t get a credit card without a SSN, it’s important to use your new card with care. Always make the minimum payments on time and, if possible, pay off your balance in full each month. Being diligent with your card will help boost your credit score and make it possible to get more credit lines later on.
If you need to improve your credit score before applying for a new card or loan, this guide can help you get where you need to be.
Interested in a personal loan?Here are the top personal loan lenders of 2018!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|7.73% – 29.99%||$1,000 - $50,000||Visit Upstart|
|6.26% – 14.87%1||$5,000 - $100,000||Visit SoFi|
|6.99% – 35.97%*||$1,000 - $50,000||Visit Upgrade|
|5.99% – 24.99%2||$5,000 - $35,000||Visit Payoff|
|4.99% – 29.99%3||$10,000 - $35,000||Visit FreedomPlus|
|5.99% – 18.99%4||$5,000 - $50,000||Visit Citizens|
|15.49% – 34.49%5||$2,000 - $25,000||Visit LendingPoint|
|6.16% – 35.89%6||$1,000 - $40,000||Visit LendingClub|
|6.99% – 18.24%7||$5,000 - $75,000||Visit Earnest|
|9.95% – 35.99%8||$2,000 - $35,000||Visit Avant|