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Building credit as a new immigrant in the U.S.

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    To qualify for a mortgage in the United States, applicants typically need a credit score. To build a U.S. credit score, the three major credit bureaus, Experian®, Equifax® and TransUnion®, assess your financial history and create a profile based on your spending and payment habits. If you’re new to the U.S. and interested in taking out a mortgage, here are some ways you can start building credit as a noncitizen U.S. immigrant on your path to home ownership.

    What is credit?

    Credit is the ability to borrow money for everyday spending or large purchases that you then pay back over time. For example, a home loan or mortgage is a loan used to purchase a home. The mortgage is paid back, typically monthly, over 15 or 30 years, depending on the borrowers’ terms.

    What is a credit score?

    Your credit score is a number that summarizes your credit history. Your credit history is what your history as a borrower looks like. Do you pay your bills on time? How many accounts do you have? How old are the accounts? Your credit score in turn determines your creditworthiness, or how much credit you may be eligible for in the future. Credit history, which impacts your credit score, is one of the main factors in a lender’s decision to grant you a loan.

    Is credit history international?

    If you don’t have a U.S. credit score, some lenders allow for a foreign credit check. This would be a formal review of your financial history in a previous country of residence. There are some foreign banks with branches in the U.S. that may be able to transfer account history as well, though many banks may not allow transferred credit for loan applications. Overall, there is no one-size-fits-all approach for international credit histories. It will depend on where you’ve banked, how those records were kept and whether your lender allows foreign credit checks.

    How much credit history is needed to buy a house?

    The amount of credit history needed to buy a house varies depending on the lender and type of mortgage. Some mortgage programs will accept varying levels of credit or a bigger down payment to supplement a lack of credit score. There are a few ways to approach the mortgage application process if you’re looking to establish your credit history. Here are some options to consider:


    A cosigner is a creditworthy party that signs onto a mortgage, assuming some of the financial responsibility — especially if the other party is unable to make payments at any point. If you’re someone with little to no credit, a cosigner may be helpful because their credit history is also used on the application.

    Large down payment

    Typically, when a borrower makes a bigger down payment there is less risk associated with their mortgage because they are borrowing less money. As larger down payments often carry less risk, they may reduce the impact of an absent or low credit score.

    Potential alternative forms of credit

    In some cases, lenders will consider alternate forms of credit. Alternative forms of credit are other ways to help prove creditworthiness. Documentation that may help support your creditworthiness for a mortgage application includes:

    • Pay stubs
    • Utility bills
    • Rent or car payments

    How to build your credit

    One way to start building credit and support your mortgage application is by getting a credit card. Responsible credit card management can help build your credit score to support your application for a mortgage. Another potential option is becoming an authorized user on someone else’s account.

    In summary

    Credit history and credit score are major components in taking out a mortgage in the U.S. If you’re new to the U.S. and looking to buy a home, some mortgage lenders may accept candidates with little to no credit. If you’re looking for a way to start building credit in the U.S., applying for a credit card is one option to consider.

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    Have questions? Connect with a home lending expert today!

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