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USA is the land of credit cards. It is almost next to impossible to exist in USA without credit cards.A credit history is a must over here. I shall try to give you an idea of the land of credit cards and how to start building your credit history.

Credit cards or plastic money as it is referred to is a conveniant form of transfer of money when we get used to it.There are many variations of these plastic cards.They can be credit cards,debit cards,ATM cards,supermarket cards,shop cards etc.ATM cards are used for getting money from the ATM machines of your bank.supermarket cards are used by shops for tracking your purchases.They do offer some price reductions for members with shopcards and supermarket cards.Shop cards are credit cards offered by individual shops for purchases in that particular shop.Debit cards are issued by the bank and can be used just like credit card but the amount is deducted directly from your bank account.  

Credit cards are hassle free method of paying for one's expenses without bothering about the availability of money at the time of purchases.The company which issued the credit card shall send a bill at the end/beginning of the month showing the payments that have been made using that credit card.we can pay up this amount before due date by issuing a bank cheque. By this method we gather time before the actual payment for the purchase is made.

There are different types of credit cards like Ordinary credit cards and secured credit cards.Secured credit cards are cards which can be obtained by actually depositing the credit amount with the card company.Only benefit of this type of card is that it will help build your credit history.Here you don't gain time before payment for purchases.on the contrary you have to deposit early and lose interest on that money.But for a beginner this may be the one favourable option as getting a credit card without a credit history is not an easy task.

The popular credit cards are VISA,MASTERCARD,DISCOVER and AMERICAN EXPRESS.When an application for credit card is submitted they will first verify the social security no and then will inquire with the credit reporting agencies.There are mainly three credit reporting agencies in USA-EQUIFAX,EXPERIAN and TRANSUNION. By virtue of social security no the history of the individual applying for the credit card is unravelled and if the applicant has been in USA for less than a year then to get credit card application approved is very rare.When they get a request from card companies credit reporting agencies,pulls your file, if one exists, and let's the company know if you have any bad debts in your background.Your repaying capacity of the credit taken and promptness of the repay is noted by the credit reporting agencies

Credit reporting agency and fair credit reporting act
Credit reports are a gold mine of information about consumers. They contain Social Security number, date of birth, current and previous addresses, telephone number (including unlisted numbers), credit payment status, employment, even legal information. Ordering your credit report once a year and knowing your credit reporting rights are among the most important steps you can take to safeguard your privacy.

The federal Fair Credit Reporting Act (FCRA) as well as state laws restrict who has access to your sensitive credit information and what uses can be made of it. These federal and state laws also set the standards for the operation of credit reporting agencies, called "CRAs" or "credit bureaus." The CRAs have also adopted voluntary guidelines to improve consumer services

What is in my credit report?

Your credit report is actually a credit history. It is created by data about you from many different sources. Companies that have granted you credit make regular reports about your accounts to the three main CRAs: Equifax, Experian (formerly TRW), and Trans Union. If you are late in making payments, those to whom you owe money such as utilities, hospitals, landlords and others may report this information to the CRA. Your bank may inform the CRA if you overdraw your account or do not make credit card, auto loans, or mortgage payments on time. Your credit report may also contain information about delinquent child support payments. The FCRA allows CRAs to report records of convictions of crime. However, it is not the practice of any of the three main CRAs to report criminal convictions on credit reports. Such information may, however, be reported in connection with an employer background check.

In addition, your credit report contains your name and any name variations, your address, and previous addresses, telephone number, Social Security number, year and month of birth, and employment information. Information in your report also includes matters of public record such as civil judgments, tax liens and bankruptcies. Because you have the right to know who has inquired about your credit file or has requested your report over the last six months, any copy of the report you receive must also include the identity of all such inquiries. Inquiries related to pre-approved offers, as well as your own inquiries, are not available to credit grantors. However, they are included in credit reports that you order for yourself.

One of the most important laws protecting your identity and credit information is the Fair Credit Reporting Act. Designed to promote the accuracy, fairness, and privacy of the information collected and maintained by credit reporting agencies, the FCRA gives you specific rights:
You must be told if your information is used against you. If you are denied credit, employment, or insurance because of information in your report, the denying party must alert you and provide you with the name, address, and phone number of the credit reporting agency used to support the denial.
You have access to your file. Upon request, a credit reporting agency must give you the information in your file and a list of everyone who has requested it within a certain time period. There is no charge if you have been denied credit, employment, or insurance because of items in your file (if you make a request within 60 days). In addition, you're entitled to one free report every 12 months if you are unemployed or on welfare, or have proof that your report is inaccurate.
You can dispute inaccurate information. A credit reporting agency must investigate items that you report as inaccurate. You will receive a full copy of the investigation report. If the dispute is not settled to your satisfaction, you may add a statement to your report.
Inaccurate information must be corrected or deleted. Credit reporting agencies are required to remove or correct inaccurate or unverified information. They are not required to remove accurate data unless it is outdated.

Can a credit reporting agency deny my application for credit? How do credit scores affect my application?

CRAs do not make decisions regarding a consumerís creditworthiness. Rather, the CRA compiles reports of what your file contains and passes that along to the potential credit grantor.

Credit decisions are, in fact, generally made based upon a number of factors that comprise a "score." Inquiries made in connection with your applications for credit may also be a factor in your score. If, for example, you have applied for several credit cards or loans in a short period of time, this may result in a lower score. Inquires made in connection with pre-approved credit offers or those you make yourself should not result in a reduced score.

If you have never borrowed money or used credit of any kind, your name will not appear in the data base of any of the above credit reporting agencies. If you have, there will almost certainly be information about you. If you have ever defaulted on a bill, or walked away from a debt owed, that information will be available.If you have never defaulted on a loan, but have made frequent late payments, that is recorded, too, and goes against your credit rating.

For new comers the best bet would be to apply for a credit card with the Digital Credit Union(DCU) which is one organisation which issues credit cards without prior credit history.To go to the site of DCU click here

To build up credit history you must either take a loan or must have a credit card.To search for a credit card click here
You must also be careful not to make too many applications of credit within the first year of your arrival.This might bring out the record of too many enquiries in your credit report.


People who like to pay cash only, have never financed a car, taken out a college loan, or a mortgage may have zero experience with credit. In that case, most card companies will reject your application, not because you have bad credit --but because you have no credit rating..

Wish you good credit building in future

This site is provided for reference purposes only.All the contents in this site are completely my opinion and is to be taken as such.
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