April 9, 2007

•  

  
  NEWS: It's Hard for New Americans to Get Credit

  Even as (legal) Americans rack up hitherto unprecedented piles of debt, most new arrivals to the United States find credit blocked to them, more often than not. Credit histories are seldom really communicable across national borders, due to the fact that measurements, tracking systems and privacy laws are all different internationally. And, as most people who are either young or emerging from bankruptcy know, having no credit history to your name is just as detrimental as bad credit, when it comes to difficulty obtaining credit. Just try obtaining a car, a home, or a credit card – you'll find that many doors as closed to you.
  
  The issue gained national media attention and subsequent prominence in January when Bank of America announced that it would be launching a pilot project to allow Los Angeles-area residents with little or no credit history to obtain high-interest, low-limit credit cards. Critics immediately jumped all over the fact that the program seemed targeted to illegal immigrants, and that the lax restrictions imposed by BoA would make it easy for scores of this population to obtain plastic. Although it is true that Social Security cards are not required under BoA's pilot, the bank claims that it complied with federal regulations for identification standards in banking.
  
  Many foreign-born immigrants come to discover that America's credit-rating system is either a headache or a dream come true. Many countries reserve the privilege of credit for the high-born and wealthy and even houses are bought with cash by necessity. In contrast, the U.S. installment payment system gives consumers a chance at a brand-new car or major appliances without a top-tier income. But there's the built-in catch: You need an American credit history of at least modest standing. Even if you may have met standards for developing good credit in your country of origin, you start from scratch when arriving in America.
  
  That includes those consumers with credit cards and sizeable bank accounts in their home countries. These assets do not transfer, desirable as they might be.
  
  
     Back to News Main Page