As a recent immigrant I felt pretty untrusted. In my late 20s, despite being able to show a year of income in the six digits, no overdrafts, I had to go to four separate banks before finding one that was willing to give me a $300 limit card.

I mean, it's not great, but you have to start somewhere, and I've only been here 9 months. Was very frustrating to have to start from scratch when I have good credit in my home country, but completely understandable.

The really frustrating thing is how your credit score influences everything - apartment hunting, mobile phone contracts, etc. That's the only reason I'm trying to build my credit at all here. It feels like having a bad credit score puts you at a distinct disadvantage in the US, which is something I've never felt before.

It makes logical sense. Is it fair? I don't really think so, but its at least logical.

So there are other ways than the US one.

How old are you? Just a few years ago, despite making a very decent amount of money and having no marks on my credit, it took an entire year for me to get a credit card. Reason: lack of credit history. A lot of people have similar stories.

>This depends on your definitions a little bit.

The part where you spend money that isn't yours and then pay it off later. That's debt.

Personally, I've learned the game so to speak and now continually get out outrageously good offers for cars, credit cards, home loans, you name it. I have a about $90k~ worth of available credit to me on my CC's alone. But despite having an incorrect black mark for a medical bill that's reported by _ONE_ CRA (the others removed it after I gave them proof that the debt wasn't valid, Experian refuses to listen and because it got reviewed once they won't review it again), I get better offers now than I did when I had a squeaky clean record.

It's an absurdly backwards system. Get debt to get more debt. Hope CRA's don't fuck anything up. Credit card management has no indication how I'll manage a loan (whether a house or car) due to the nature of spending and utilization, but financial institutions treat it as such.

Quite frankly we need "stricter" credit laws across the board.

1. Start out with a "default" score at the very least.

2. Cap interest rates on CC's (20% APR is stupid). No reason a CC should have an interest rate of above 12%.

3. Don't allow medical debts to be displayed in pulls from CRA's. If the institution really wants to see "everything", make them pay a decently high fee for it. They must also explicitly state that in their loan consideration for you, they took into account medical debt. Craft laws around whether or not financial institutions should be able to consider these debts, depending on the loan being offered.

4. Prevent employers from pulling credit history. Your finances are not their business.

5. Prevent landlords from pulling credit history. They are not loaning you money. If they want to pull your credit history, then they need to also contribute to it positively (i.e. report payment history during the length of your lease, accurately).

I disagree, if you have a terrible credit history, leasing to you may be very risky. They aren't loaning you money, but they are trusting that you will have the money every month to pay them with.

Even more importantly than that: the lessor gives the lessee custody and (limited) care-taking responsibilities over what, in most cases, represents a significant investment of capital.

it's me, the tenant, who is loaning money to my landlord.

I don't really understand why, but it's way easier to get a credit card with no history if you are in college. People who would easily be approved as a senior in college will get denied 12 months later. It's stupid that it works this way, but some of the best financial advice you can give a college student is "get a credit card before you graduate."

> 4. Prevent employers from pulling credit history. Your finances are not their business.

This resonates intuitively with a lot of people (myself included), and is actually the law in 11 states. There are some interesting subtleties that should be considered before making up your mind though. In brief, the practical impact can make things _worse_ for some demographics often assumed to benefit from this type of legislation. A mass market article: https://www.washingtonpost.com/news/wonk/wp/2016/03/23/the-l...

The original research: http://scholar.harvard.edu/files/shoag/files/no_more_credit_...

> 5. Prevent landlords from pulling credit history. They are not loaning you money.

If all goes well, they aren't loaning you money. However, in most states it takes at least a couple of months to lawfully evict a non-paying tenant. So landlords are implicitly offering to loan tenants a few months rent.

I think the actuary-types who design the scoring models would disagree vehemently with this one. Scoring models are built from regressions on actual default rates.

It's one thing to say "I see you've been late on a few of your car payments, so we're going to give a higher interest rate." and it's something else to say "You have a few unpaid medical bills/late CC payments so we're going to give you a higher interest rate on this car loan."

I just have a hard time really believing that is the case. Often credit issuers simply look at the totality of everything, instead of appropriately looking the history of the specific financial contract they're wanting to issue.

That doesn't mean that systematic failures can't happen, but they're pretty unlikely. It's much more likely that you underestimate the correlation between these disparate defaults than that the banks overestimate it.

This quite literally happens already.

How many cards do you have? I understand it's mostly theoretical but I'm wondering why would anyone want to use their high-interest credit card to borrow even a few tens of thousands? Or any high-interest vehicle of debt for that much money, for that matter.

>but I'm wondering why would anyone want to use their high-interest credit card to borrow even a few tens of thousands?

I don't know, but I'm sure as heck not going to utilize them that much! I am sure the credit issuers wish I did though.

Some credit cards have promotional low or no interest rates for a year or so. You can then balance transfer to another promotional rate card at the end of the year. Also many issuers (Barclaycard, AMEX, Capital One) have low or no interest rates for active duty military.

Here are a couple ideas: lawyer fees during a contested divorce and emergency spending from being out of work too long.

I never understood this - why is someone else asking for your credit history a ding on your credit report? It seems really silly to me, but I must be missing something.

Inquiries only affect your credit when they're from someone whom you've authorized to pull your credit as a potential creditor: https://www.nerdwallet.com/blog/finance/credit-report-soft-h...

The way it works, is they usually only give someone a $500 limit, then double the limit every 6 months If you pay monthly.

Once you get a job you can get a bump to $2000 limit with the 1.5% back easy. You just need to get a job for that.

I'm 1.5 years out of college and have access to ~100k in credit cards with a score of 750. I started with a score of 540 1.5 years ago. It's really not hard at all.

My credit report (free from my bank) tells me my score is slightly lower than it would ordinarily be because of how short the card history is. I still get a couple "pre-approved" card offers every week and the occasional offer to raise a limit, but I just shred them.

It increases your score because you have a lower credit utilization and you have more available to you (supposedly signaling how responsible you are).

I just have a lot of cards. If they want to give me bonuses for signing up I will take them. Free money.

Plus usually you can call and get the second year free too.

Regardless, I can cancel w.e. and the increase in my credit score is worth it. At the moment if I want to buy a house (for example) I get the best rates on loans

At this point, I have enough credit from credit cards alone to buy a small house.

It doesn't matter how many times you swipe your card, you can get a card and never use it and and still counts for your credit history. The point being you have credit available to you but you aren't using it. You have four years of not running up your credit card, that's huge.

EDIT: Huh, apparently I've been ill-informed about credit history [1]. Guess I've been a dumbo and one of today's lucky 10,000.

[1]: https://www.reddit.com/r/personalfinance/comments/188xmi/is_...

FICO is based on your credit utilization (amount owed vs credit limit), history of repayment, mix of types of accounts (this has a minimal impact), number of new accounts, number of credit inquiries (aka hard pulls, this is also minimal), and length of credit history.

You had credit available to you for four years and you manage it very, very well.

Other scoring algorithms besides FICO may weigh different things differently but FICO is currently used in most lending decisions so it's what matters for now.

If you want to see your real Experian FICO 8 credit score for free you can do so at freecreditreport.com which is a site now owned by Experian. They break down each part of your credit score and grade you on each. (A-F)

This is not something that you can have different opinions about it's how the US credit history system works by definition.

Not saying one is better than the other, it's just how it works in the US.

- Credit card utilization (balance as a percentage of available credit at last statement close)

- On-time payments (you just have to pay the minimum required by the date specified for it to count)

- Derogatory marks (collections, bankruptcies, foreclosures and liens)

- Average age of accounts (this favors older people who have been using credit a long time but not opening a lot of accounts recently)

- Total number of accounts (also rewards a mixture of types - car, student, credit card, mortgage, etc)

- Hard inquiries (very slightly dings your score if you're currently looking for credit, punishes you harder if you're desperately applying to everything you can find because this indicates financial emergency and therefore high risk).

https://www.creditkarma.com/article/credit-score-factors

If you use CreditKarma, it'll explain all this and how the values on your credit report fit in to the averages.

I am in no way affiliated with freecreditreport.com, it's just a site I find incredibly useful. It's now owned by Experian and it gives you your Experian FICO 8 credit score. They break down each part of your credit score and grade you on each. (A-F)

There's other sites like credit karma that do similar but they use vantage score which is also known as FAKO score and isn't used by lenders but is a good indication of what your FICO score may be.

I am not talking about credit card history but about history of being a US citizen, having a bank account etc.

I think a lot here are missing the point.

The question is not about your credit score but about getting the credit card to begin with. Once you get the card they assign you a credit score but in order to get it you have to start building debt (and as a foreigner I had to do that with my own money)

You also don't have to start building debt. Having a credit card you don't use is enough.

Unless: Someone has them cosign for a loan or credit card. This is somewhat common with a first car loan or some student loans, but less common with credit cards. They won't be able to do that if they have a low score.

Otherwise, you are basically on your own. The credit stuff you would have experienced coming here is what many 18-year olds hav to deal with. Some older women find themselves in a similar position - the accounts were all in their husband's name.

Perhaps one's parents can't help in any formal way, but for me, my parents' creditworthiness and relationship with a local bank helped get me my first credit card.

Right before I left home for college, I applied for a credit card with my local bank, and was initially declined. When I asked for reconsideration by the branch manager, he looked into the situation and indicated that he couldn't do anything to assist.

When my mother found out I was declined, she took me back to the branch, and asked the branch manger to reconsider the credit decision. Upon a review of my parents' standing with the bank, the branch manager overrode the previous decision and I was given a Visa card with a moderate ($1000 USD) limit. My mother wasn't even asked to co-sign on the account, provide any kind of guarantee, or be associated with the credit card in any way.

With regards to credit score, of course, I never said it did.

With regards to getting a first credit card thats simply not true. Maybe if you go into a bank and open an account but if you have had a relationship with that bank for several years it is going to help you get one to begin with. Of course it helps you if you have had a history with the bank. And of course there are americans who can't just get a credit card thats still not what I am talking about.

I know plenty of 18 year olds who never had to deal with what I had and no matter what it doesn't really change anything from my original claim which is that the US credit history system is built on distrust not trust.

Citibank offers customers credit cards based on how much they have on their savings account. So it's simply not true that history doesn't help. Of course it does as it should.

I did not have that, or any cosigned loan.

Instead, they will issue you a 'secured' credit card, where you get a $300-500 limit on a card against the same amount paid to the bank as security. Only after a year or 2 of this, will the bank actually issue credit.

Maybe you had an account/history with the bank for a while, and that made a difference?

I don't understand exactly why I am being down-voted.

The system is at it is it's not something I made up.

But please point to where I am wrong about the credit score system.

> You are american you have a history and your parents have a history.

Parents have nothing to do with anything unless your parents cosign or add you as an authorized user on their cards. Being American has nothing to do with anything other than some cards require you to be a US citizen for some reason, my BVAA card does for example. My parents are scumbags and their scummy-iness doesn't effect my ability to build credit.

The trick is to apply for the right card, different lenders/products target different populations. A store card or a secured card is a good start in building credit, that's what I did when I was young and had practically zero income. My limit was like $300 but it was enough to get me on the map. I didn't have to deal with being rejected because I applied for the product that fits my life situation. If you just apply for the heavily advertised cards you are not going to get a good result. After that I applied for a crappy card I was "pre-approved" for that came in the mail. Once you have a credit history you're going to get offers in the mail unless you opt-out.

Getting a charge card (which is not the same as a credit card) may be an option too, not sure on that one.

>The question is not about your credit score but about getting the credit card to begin with. Once you get the card they assign you a credit score but in order to get it you have to start building debt (and as a foreigner I had to do that with my own money)

False, you don't have to have any debt to get a credit score. Having credit available to you you don't use is enough.

First you say

>You are asked about assets, income etc. but those things have very little effect on whether you get a credit card or not.

Then you say:

>I wasn't talking about credit history but about history as in, a customer in a bank for years. These are also factors for how easy/hard things like this is.... There is a difference between being a US citizen having had bank account most of your life and then being a foreigner who just got yours.

Those things are mutually exclusive and both can't be correct.

>There are plenty of other ways to credit companies could gauge inside your economic maturity as much of your financial history have been done via debit card for more or less the same transactions that you are going to use your credit card for... You are not suddenly going to become financially irresponsible just because you get credit

This is beyond false and laughable. Nobody gives two craps about "economic maturity" they want to know "is this person likely to pay back the loan?"

>Second it's a fairly know issue that the way creditscore is established is pretty flawed.

It has its limits but are you questioning actuaries that crunch these numbers for a living? I mean, I'm assuming they have a reason and numbers and there's data to back it up and they just didn't say "lol, lets make up some shit." If they were getting bad results and losing money they'd change the algorithm.

> I live in the US so yes I have a pretty good idea of how it works.

Almost no Americans have any idea how "the system" works, its very specificity knowledge and there's tons of myths. You know how many times I've heard people say "my credit is terrible, its around 750?" 750 is an excellent score. People get credit reports confused with credit scores and all kinds of "I heard," "I assume," etc.

The very fact that things like how much you have on your savings account can affect your ability to get a credit card disproves your claims.

You might yourself be the one who have "heard" and is "assuming" things which plenty of other commenters in this thread shows.

As a personal anecdote, I avoided credit cards until age 31, but had a bank account with Wells Fargo since I was 16. Because I had no history, almost no one wanted to give me a card despite my high provable income. I got my first credit card with capital one (for a hilarious 300 dollar limit).

But two months later after I became a known credit card user I started getting credit card offers in the mail from a variety of sources -- Wells Fargo offered me considerably more credit than the others, presumably because some system of theirs thought I was more trustworthy (long-standing account history? Actual visible income in the bank account?) They even offered me a rewards card even though I only had 1 month of history.

This has to do with your chance of getting a credit card to begin with. There is a difference between being a US citizen having had bank account most of your life and then being a foreigner who just got yours.

Not sure why you keep insisting I am saying something else than I am.