Starting out in a new country is never easy, and being able to start a life in a new country often times requires you to have some form of credit in order to progress financially and professionally. When applying for non secured credit cards or even homes with little to no credit, it's a lot harder to obtain these approvals which could be very discouraging for new immigrants in a new country.
However, the best tool new immigrants should consider when starting out in a new country is to apply for a Secured Credit Card. These cards require no credit history and uses your security deposit as collateral for the card. By getting an instant approval on these cards, you can worry less about being approved for a card, and work towards building your credit and starting out your life in a new country.
Below are some reasons why you should consider a Secured Credit Card when arriving to a new country:
Renting a Property
Having no credit and trying to rent a home is a lot harder of a task than you would imagine. These days, landlords are often checking for a credit check on prospective tenants in order to see which tenants would be deemed "safe" and are seen as low risk for paying off their rents costs. Being able to build your credit score will open up the options of the homes you are able to rent out. Some homes may be a lot easier than others when it comes to securing a successful rent. More expensive homes may sometimes require a higher credit score for you to rent out. A Plastk Secured Credit Card is the best way for you to build this credit and allow you to go from home renter to a home owner.
Buying a Car
Other than having a place to live, having a vehicle to transport is also important (depending on the location you live). If you choose not to uber or take a taxi from place to place, then it seems as buying a car would be your best option. Your credit score not only impacts your ability to buy a car, but also your ability to lock in lower interest rates. Those with poorer credit will often times be given a higher interest rate which results in you paying more towards interest charges by the end of your term. This not only increases the payment amounts you are making for the car, but also slowing down the rate of growth for your own personal finance.
So for new immigrants, it is a good idea to build on your credit in order for you to really keep your savings and allow yourself to have a better financial position when it comes to saving money. The difference between a 1.99% interest rate and a 5.99% rate could be pretty hefty depending on the value of the car itself.
Applying for Credit Cards/Lines of Credit
If you find yourself needing more money than you currently have, sometimes people will turn to borrowing money in order to solve this problem. By having a good credit score, this not only allows you to borrow higher amounts of money, but also gives you the best rate of interest so you won't be paying high interest fees like with buying a car.
Having multiple credit cards is also useful for not only having more access to money, but also taking advantage of different reward programs for different cards. While you may be generating cash back for one card, you might also be earning travel points or general points for another card. Having another card will also help with building your credit score given that you pay it off on time.
Lines of credit are another useful financial tool if used properly. The benefits of these accounts are they allow for you to withdraw the money and are lower interest rates in comparison to credit cards. This helps when you are looking to fund some projects or need some extra cash apart from what you earn at your job.
Buying a Home
Lastly, when it comes to your journey in a new country, you will eventually want to buy your own home rather than renting. By having the appropriate credit score and enough capital to put down towards a home, this will allow you to get approved for mortgages and allow you to purchase the home of your dreams.
Although this takes more time than the above options, this requires credit building throughout the years in order to set you up in the best position possible for securing your first home. By paying lower interest rates in the previous sections, this allows for you to build your assets much quicker and will allow for you to buy a home much quicker. This requires lots of patience, hard work, and proper budgeting techniques.
