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As an international student or recent graduate with an F-1 visa, you’ll eventually want to focus some attention on building and managing your credit in the US.
You may know many students that came for their studies and will leave just as quickly. However, many choose to stay in the country for professional experience or to make a new home for themselves.
And because credit is so central to American life, it is important to understand everything from building a good credit score to securing credit cards. That’s why understanding the type of visa you hold, and how long it allows you to be in the country, will help you decide your next steps.
Here’s a full guide on everything you need to know about your F-1 visa and managing credit to set you up for success in the US.
Why it’s hard for OPT visa holders to build credit
When you’re working in the US on the OPT extension of your F-1 study visa, it’s critical to remember that you only have a limited period in the country. While you may be aiming for a permanent position, that’s not what your passport says officially.
Most banks and credit providers can only work with the information in your passport, which can make it difficult to secure enough credit for building credit history as an immigrant or international student in the US. Read this article on how changing jobs on OPT visa can impact your overall profile.
If your passport says you need to leave the country in three years, it’s going to be very difficult to find someone willing to extend an auto loan that spans five years. How will they find you after you leave the country? Will they need to deal with the hassle of liquidating that asset to recoup their funds?
But, that doesn’t mean you won’t have opportunities to build your credit while you’re working in the US on your OPT visa. In fact, this is the very best time to get started, especially if you plan to remain in the country for several years.
How to build your credit score on an OPT visa
To secure credit for purchasing big-ticket items, such as cars, houses, or further education in the future, you’re going to need to begin to build your credit score from the ground up through responsible management of bank accounts, low-risk credit cards and constant awareness of your credit usage.
TIP: In the US, credit (FICO) scores range from 300 to 850. The higher the number, the better your credit score. Generally, scores over 700 are considered good. Scores above 800 are considered excellent.. Because your credit score impacts your eligibility for loans as well as your interest rates on credit cards and similar products, it’s worth some effort to achieve the best score possible.
Tips for building credit while on your OPT visa
Find out if you have a US credit history
Some payments, such as student loan repayments are often reported to credit bureaus, so it’s possible that you have a credit history even if you don’t have a US bank account or own a US credit card.
If you don’t have any credit history, consider getting your US Social Security Number (SSN)
Having a Social Security Number (SSN) makes living in the US easier. And if you’re following the visa track from F-1 to Green Card status, obtaining your OPT visa is the first chance you’ll have to apply for your SSN.
Social Security Numbers are used to report your earnings to the relevant government departments. In this way, it functions as a tax identification number. Having an SSN implies that you have (or have previously held) the right to work in the US, but in and of itself, it doesn’t confer the right to work. SSNs also have little to do with your current visa or future ability to remain legally in the country.
Once you have your SSN number, it will also be easier to obtain credit in the US. While this number doesn’t unlock the full range of financing open to American citizens and permanent residents, you don’t need to wait on your SSN to begin looking at your options. You don’t necessarily need your SSN to apply for a credit card; some companies accept ITIN (Individual Taxpayer Identification Number) as well.
How to get your SSN with your OPT extension
You can ask to be assigned your Social Security Number (SSN) at the time of your OPT application. If you didn’t do so, you can contact your local Social Security Administration (SSA) Office and make an appointment to go and apply for your SSN in person.
You will need the following documents to apply for your SSN on your OPT extension:
- Your EAD (Employment Authorisation Document) card
- Your passport
- Your updated Form I-20 and Form SS-5
- Your I-94 card
- Your SSN application
Get a credit card
Can a student apply for a credit card? Absolutely.
A credit card is one of the best credit-building tools available. If you make payments on time, you don’t need to pay any interest. You can establish yourself as a responsible credit user by displaying good credit management. Depending on your requirements, you can opt for a secured or an unsecured credit card.
You might want to open a bank account first. It is possible to get a credit card without having a US bank account, but having one does make life in the US a lot easier.
How to open a US bank account on an OPT visa
As an international student in the US, you may have already opened a local bank account to manage your funds during your studies. But if you haven’t, it's advisable to do this as soon as possible. You can use supporting documents from your university to make it easier.
In the US, you can choose between checking and savings accounts, but you’ll need to deposit money to open either type of account.
It’s also important to note that each bank has their own set of limits and regulations, so it’s worth shopping around in order to understand what is available.
If you have an established relationship with a bank and your accounts remain in good standing, you’ll have more credit card options while working on your OPT visa.
To open a US bank account as an international student on an F-1 OPT visa, you’ll need:
- Proof of identity: your passport will suffice (though you may also need a secondary form of ID)
- Visa information: found in your passport
- Proof of residence: rental contract or evidence of university housing
- Enrollment letter from your university
- Any I-20 forms you’ve received
- Funds to deposit
First, the good news: you can absolutely get a US credit card on an OPT visa. The only downside to an OPT credit card is that you won’t have as many options as a resident. The hunt for the best credit card for international students will lead you to explore the different types of credit cards available, and the benefits that they provide.
Remember, your visa only allows you to stay in the US for one to three years. Banks only want to ensure they will not have trouble recovering funds lent to you if or when you leave the US.
Types of credit cards available to OPT visa holders:
The funds you have available are linked to funds in another account, or you pay an advance deposit from which you draw funds.
Unlike a debit card, the funds are not immediately withdrawn from the linked account. But the issuer has the ability to withdraw from there if you fail to make minimum payments.
Based on your credit history and score, the issuer will provide you with a limited amount of credit.
If you haven't had time to create a strong credit profile, expect lower credit amounts and higher interest rates. But, responsible use of this credit contributes to a strong history in the US, it's worth considering.
A secured credit card is typically easier to get for international students, and is just as useful for building good credit in the US as an unsecured credit card.
Many companies offer both types of credit card accounts to those working on an OPT visa. And if you’ve been renting off-campus accommodations, you likely don’t even need to leave your house to learn about these products, just look for advertisements in the mail.
What you should know before applying for a US credit card on an OPT visa:
- The best bet to obtain an unsecured credit card is often the US bank where you have your checking or savings accounts.
- Interest rates typically range between 13% and 25%. If you really need to accept a higher rate because you’re still building your credit history, insist on a lower credit limit amount.
- US banks are required to disclose the Annual Percentage Rate (APR) as well as interest rates, so that you can factor in standard fees.
- If you opt for a secured credit card, look for one that allows you to transition the account into an unsecured product in the future. Opening new accounts can lower your credit score as can closing accounts with which you have a long history.
- A good credit score relies on you to use your credit cards frequently while maintaining a low balance and avoiding late payments at all costs, which is seriously detrimental to your credit score.
Can I get credit for cars or houses on an F-1 OPT visa?
The short answer is no. International student car loans are often riddled with concerns such as loan duration vs duration of stay in the US.
It’s possible to find a car loan if:
- Your auto loan duration is less than your visa allowance (a maximum of one or three years). An auto loan for international students is seen as high-risk and can mean high monthly payments for the borrower because of the short duration of the loan.
- You have the balance in cash.
- You work for a large company that works exclusively with a dealership and has negotiated special financing arrangements for international employees.
Mortgages in the US usually have 15 to 30-year repayment terms. And because there is no guarantee you’ll be in the country a few years from now, banks won’t extend such long-term financing. That said, there aren’t many technicalities standing in your way if you have the cash to purchase property in the US.
Are there personal loan options for F-1 OPT visa holders?
There are a few possibilities for obtaining a personal loan on OPT, both secured and unsecured, though the options are few.
Your bank may be willing to offer a short-term personal loan for student visa holders as long as they are convinced that your salary, monthly expenditures, and fledgling credit history are in order. Other local institutions aren’t likely to extend such an offer.
Additionally, new service providers aimed at providing international graduates and immigrants with fair access to financial products may be able to assist you. While there are only a handful of such providers, they may be your best bet if you need access to funds to establish yourself in the United States.
What’s the next step for F-1 OPT visa holders?
Managing your credit on an OPT visa can seem a little daunting at first, especially if you already established good credit in your home country before studying in the US.
But if you think of it as the beginning of a successful stay in the US, you’ll soon have a respectable credit score, which is the best foundation you can have when you move from an F-1 OPT extension to an H-1B visa.
Need an international student loan to get your F-1 visa in the first place?
Once you've gotten into your dream school in the US, we can help you with an international student loan to attend it.
The purpose of this guide is to provide prospective students with an overview of the application process for a US student visa and should not be regarded as legal or immigration advice or as a substitute for the official information published by the U.S. Citizenship and Immigration Services (USCIS) from time to time or any instructions and/or advice provided by US embassies and consuls. Whilst we have carefully compiled the guide in accordance with the information published by USCIS, Prodigy Finance Limited does not accept liability for any inaccuracies, mistakes, omissions or outdated information in the guide and we encourage prospective students and other readers to consult the USCIS’s website. Prodigy Finance Limited is not authorized by the Department of Justice (DOJ)'s Executive Office for Immigration Review (EOIR) to provide immigration services and will not provide any additional information or assistance to any person to apply for a US student or other category visa.
If you want to know how to improve your international student credit score, H1-B visa or if you are at an even earlier stage and simply preparing to be an international student, check out more great articles in our Study Centre.
Post updated for accuracy and freshness on October 30, 2019. Originally published on November 26, 2018.