We’re always reminding international students that having credit isn’t just about buying things. It’s also about access and credibility. Access means any service that requires credit to use becomes available to you. And credibility, of course, means proof that you are financially responsible. There’s no quicker way to do that than to show someone your credit report. That’s why being credit invisible—either having no credit or limited/outdated credit history—creates a challenge for anyone living in the US.
As most young credit card holders realize, it’s actually quite easy to spend responsibly and make payments on time. When we see articles like this one, we instantly know the problem: education. Most Americans don’t receive proper instruction in the US financial system; international students even less so. It’s why so many younger and older consumers are prohibited from real credit and offered alternatives like prepaid or secured cards. However, using prepaid cards or debit cards with a credit company logo will not build your credit. Secured cards simply pass off the liability to consumers. It’s always best to use a proper US credit card.
Stay Credit Visible
It’s easy to stay credit visible simply by using a proper credit card on a regular basis and staying on time with payments. Pay off your balance in full each month or pay it down to at least 20% each month (if you have a $400 credit limit, you should carry no more than an $80 balance from month to month). And, most importantly, USE CREDIT EVERY MONTH. If you do not feel comfortable using credit for consumer expenses, use it for automatic online payments then pay off your balance with an automatic withdrawal from your bank. No matter what your financial situation, staying credit visible takes so little effort and offers huge rewards in terms of access and credibility.