Selena moved across the border to go to school, and she was frustrated when she got turned down for a cell phone. She got a secured credit card and started using it for small purchases, paying the balance off immediately every time.
One month she used her credit card to buy a $30 skirt, and right away she used her bank account to pay off the entire amount. The next month she charged a $50 textbook and again paid it off before the due date. She kept charging small amounts and paying them in full.
In a few months, she was able to get approved for a department store charge card. She handled it the same way, making small purchases she paid off immediately. She applied again for a cell phone, and this time the provider approved her application. Five months later when she needed to buy a car, the dealership happily approved her for a loan.
After you move to the U.S., once you have your first credit card, use it regularly and pay it off just as regularly. Don’t borrow the whole amount, just make small purchases you can pay off before the due date.
Make at least one purchase a month using your card. Never, ever pay late. After a few months, apply for a second type of loan.
It seems counter-intuitive. People ask why more debt signals financial responsibility. It seems like people who have money in the bank and just pay cash show they’re financially responsible, but that’s not how lenders see things.
Banks and financial institutions like to see individuals responsibly handling different kinds of debt, not just putting money in the bank. Getting approved for more than one type of loan will improve your credit score. Gas station cards and store credit cards usually are easier to qualify for. Also, a student loan or installment loan gives you a better mix.