Of course, credit problems can arise, but you can recover from mistakes by taking action. “There are always ways to get on the right track,” Gaitan says. “Just start sending all payments on time again, and reduce any revolving debt so it’s well under the credit limit.”

Step 3: Establish credit by borrowing and repaying

Since qualifying for unsecured loans and credit cards is largely dependent on your credit reports and scores (you’ll also need an income), it can be challenging to get them without an established credit history.

“Being a credit-driven economy, immigrants in the U.S. are faced with a typical chicken and egg problem,” says G. “To get access to good credit products, one needs to have a good credit score. And conversely, to build a good credit score, one needs to have access to credit products.”

Credit cards for new residents are available but for Jorge Vivanco, a compliance manager at Self Financial who came to the U.S. from Mexico when he was 17, misinformation about how to get one was frustrating.

“I was told to go and apply for a credit card at BestBuy and buy a TV or laptop,” says Vivanco. “To my surprise, my credit card application was denied due to not having any credit history. During that time, my question always was: How am I supposed to build credit if you’re not giving me credit?”

Here are a few good ways in:

Put down a deposit for a secured credit card

With a secured credit card, you put down a cash deposit that guarantees the credit line. The issuer would then grant you an account you can use the same way as an unsecured credit card. Some issuers will convert secured cards into unsecured cards after you’ve handled the card well for a certain number of months, and the security deposit will be returned to you.

Apply for a low-limit unsecured credit card

It’s possible to get an unsecured credit card with a small limit that grows with responsible use. Nicola Devilla, a talent acquisition recruiter, came to the U.S from Belgium at the age of 26. “I found out that no credit history was worse than bad credit because I was a blank slate,” says Devilla, who applied for several credit cards and was turned down. “Then I got a mailer from Discover for a small limit card and I got it! They increased the line every few months and now it’s around $20,000.”

Take out a credit builder loan

Credit unions, which are nonprofit financial institutions, offer their members credit builder loans, though a few banks and online lenders do as well. You would borrow a small amount – typically $1,000 or less – and repay it over the course of six to 24 months. The money you borrow is deposited into an interest-bearing savings account or certificate of deposit. After the loan is repaid, you get the money plus a positive credit history.

Get a cosigner

If you know someone with good credit who is willing to cosign on a loan, you can jumpstart your credit. That’s what Vivanco did, when he wanted to finance a car without a credit history. “Luckily, my aunt, who had been living in the U.S. for ten years, became the cosigner and I was approved,” he says. “If it hadn’t been for her, it would have taken much more time to establish a good credit history.” If you use this method, be very careful to send your payments on time. The account will show up on both of your credit reports, so delinquencies will affect you and the cosigner.

Become an authorized user

Another way to add information to your credit file is to be added to someone else’s credit card as an authorized user. You will then have a card with your name on it and can make charges, but aren’t responsible for the payments. The credit card will show up on your credit report, so as long as the primary account holder treats it well, it can enhance your credit score.

Bottom line

As more positive activity is recorded on your credit file, your credit scores will rise. Eventually you will be eligible for low-interest loans and credit cards that enable you to earn rewards such as cash, points and miles as you charge, as well as providing you with a range of consumer benefits and valuable perks.

Source: creditcards.com