Samata Sirsikar would have had no trouble being approved for a credit card in her own country of India had she applied there. She had a respectable position with an international corporation and a proven track record of prudent use of credit. However, Sirsikar's great credit history did not accompany her to the United States in 2015 when she came to seek a master's degree in business administration at San Jose State University. She was allowed to create a bank account that came with a debit card; nevertheless, the application for a credit card that she submitted to the same bank was denied.

Because Sirsikar did not have a credit history in the United States, she could not open a credit account there. However, opening a credit account in the United States is almost the only option to construct a credit history in this country.

If you're a student studying abroad or a recent immigrant, you've already run into this catch-22 situation. Even while it may be more challenging for immigrants to the United States to get a credit card, it is possible. The steps involved in establishing credit are outlined below for your perusal.

Importance of Building Credit

Your credit history provides insight into how you have historically managed credit. It is the foundation of your credit score, and lenders use it to determine the level of risk associated with lending you money based on that score. If creditors cannot verify your credit history with any of the three main credit agencies in the United States, they will be hesitant to give credit to you. However, you can establish a solid history. In that case, you can borrow money whenever you need it at reasonable interest rates and on agreeable conditions.

"Lenders will be hesitant to give you credit if they cannot verify your history with one of the three main credit agencies in the United States." The challenge for immigrants is that whatever credit history they may have established in their home country does not, in most cases, accompany them to the United States. According to Rod Griffin, the head of public education at the credit agency Experian, financial institutions in other countries keep information private from the bureaus located in the United States that create credit reports.

"To disclose such information, they would need to comply with all of our United States' rules around credit reporting," he explains. However, since the restrictions in other countries are so drastically different from those in the United States, it is often challenging to easily transfer the credit files of new immigrants or international students. This implies that newcomers to this nation often begin their credit histories with a clean slate regarding establishing credit.

Building Credit With Secured Card

According to Griffin, "in order to build a credit history, you are required to have a credit account established in your name." "There's not much more to it than that," you may say.

Straightforward but only sometimes a simple task. It might be challenging to secure your first account. Cardholders of secured credit cards in the United States must make a security deposit to safeguard the lender from financial loss if the borrower defaults on their payments.

These cards may be a useful alternative for those new to this nation; nevertheless, issuers may still want you to show them a few fundamental things before they let you start an account with them. You may need the following:

• A permanent address. Lenders want to know they won't have trouble locating you if they need to. Sirsikar has said that now that she has a permanent residence, she intends to submit a new application for a credit card.
• A job. Lenders want evidence that you have a source of income to know you can repay any money you borrow using your credit card.
• A deposit in a bank.

Building Credit with an 'Alternative' Credit Card

Even if you can receive your security deposit back at some point in the future, it may be challenging to come up with the necessary amounts upfront and then have those funds remain unavailable for a certain time. However, during the last several years, several new credit card issuers have begun investigating various strategies.

These "alternative" credit cards do not employ the standard FICO-based approach of determining creditworthiness and thus do not need a security deposit. They rely on a distinct strategy. Instead of looking at your credit report, they may use internal underwriting algorithms. Data from your job or education, as well as your income and savings, may all be included in these models. In addition, a few are tailored specifically to candidates from outside the United States.