Student - no credit history and a unique problem

Rohan,

I have been in this country for close to 15 years, and came as a student, just like you. I faced the same issues just as you, in establishing credit in this country.

Knowing what I do now, if I were you, I would NOT bother with any of the big banks .. HSBC, CapOne, BofA, they are all highly likely to reject you.

I would suggest that you take two steps:

(a) Join a credit union. I did a search for the term "credit unions in troy ny" in Google, found two that presumably you can join. Hudson River Community Credit Union, and the other is RPI Employees Federal Credit Union. Both in Troy. Credit unions are just like banks, except that they have a limited field of membership (meaning not everyone can join, you have to be a member of a select group). You become eligible to join HRCCU by virtue of being a student at RPI. The second one is technically a credit union for university employees, I am not quite sure if students are allowed to join --- please ask them. But if you are here on an teaching or research assistantship (as I was -- not sure if you are in grad school or undergrad), you are eligible for membership. From what I read on the net, the RPIEFCU has an office on the campus itself.

Joining a credit union is just like opening a bank account ... you open a savings or checking account, and you are asked typically to keep a minimum amount (that you will not be able to access unless you close the account) in a "share" savings account -- typically $5 to $25. Of course, you will need to provide proof of identity etc ... just like you did at HSBC.

The "disadvantage" of a CU over a big bank is that you might find withdrawing money a bit of a chore, since you can withdraw money fee-free from only select ATMs that the credit union. As long as you do most of your banking on line, and willing to make a trip to the credit union office perhaps once a month, this should not be a big drawback.

(b) Once you become a member of the credit union, ask them if they can also grant you an unsecured card, even if low limit (typically $500). If they'd, you are golden, and you are on your way to establishing credit. Even if they don't, ask them if they offer you a secured card. Put $500 of your own money, more if you can afford it, in a secured account, and in turn they will give you a Visa or Mastercard account with a credit limit of a certain percentage of your deposit (typically 80% to 100%). Go for it, in about an year, IN ABOUT AN YEAR THEY WILL UNSECURE IT!

The big advantage of putting more money down on the deposit for secured card is that, once the card is unsecured, you will have a credit card with that credit limit. Obviously, the higher the credit limit, the higher the limits will be on the credit cards that you will later accumulate in your life in USA (as most lenders typically look to match the credit limits showing the report)

Credit Unions are run in infinitely-more consumer friendly way than big banks are. You might gain a sympathetic ear at the credit union from a loan officer who might alter tailor-made solutions for your dilemma, than a big bank who uses a computer to approve/reject applicants.

 

Rohan,

If you are unable to get a card with a local credit union, one more thing you might want to consider - you can apply for a gas card from one of the local gas stations. They typically are more lenient for granting credit to those without, and are typically very low balance cards (like 200 - 300 dollars). Even if you don't drive, you can "charge" a snack or drink every few weeks on the card, pay the balance every month, and in 2-3 months you will have an existing credit line in good standing which will help you to then get one of the student credit cards everyone else has been talking about.