How to Build a Good Credit History
Take Care of Your Credit History
Building a good credit history takes time and patience. Don’t start by applying for one of the major credit cards, because you will probably be turned down. Financial institutions don’t like lending to people whom no one has trusted in the past. Start small and move forward step by step. Here are a few suggestions:
- If you live in the New York metropolitan area, go to the Polish & Slavic Federal Credit Union (www.psfcu.com, tel. 1-855-773-2848). The credit union understands the needs of newcomers and will certainly help you.
- Open a savings account and a checking account. This by itself does not build a history, but it lays the groundwork for further financial steps.
- Apply for a secured credit card – a card secured by the balance of your savings account.
If your bank does not issue secured credit cards, ask about them at a credit union or compare offers from several other banks.
- Deposit some cash in a savings account and apply for a personal loan secured by the balance of your savings account. Pay off this debt early. This move may seem pointless, but it may be the only way to get your first loan. If you deposit the borrowed amount in your savings account, the interest you earn will reduce the cost of the loan. Make sure the bank reports this loan to the credit bureau.
- Apply for a store credit card – these are easier to get than the major cards such as MasterCard, Visa or American Express.
- Try to get one of the “gas” credit cards issued by gas station chains.
- If, after following the tips above, you still cannot get credit, ask a relative or friend who has a good credit history to become your guarantor (co-signer). Remember that co-signing a loan is a serious matter for the co-signer, because if you default, he or she will become responsible for it.
Warning: Don’t open too many credit cards, because creditors view this negatively.
Foreign Credit History in the US
Attention, newcomers! Do American credit bureaus take into account a credit history built abroad? Unfortunately, no. American credit bureaus rely only on information from American financial institutions, not foreign ones. Therefore your loan repayments abroad will not be taken into account, which sometimes has its good side, because some foreign credit bureaus do not collect positive information, only negative, creating “debtor lists.” That is why you have to build your creditworthiness in the US from scratch.
One can expect that globalization and advanced computerization will help spread international credit reporting agencies. Already, large American credit bureaus have foreign branches, for example Equifax. In addition, some companies specialize in providing corporations with detailed information about the foreign credit of prospective employees or business partners.
When applying for credit, you can refer to your foreign credit history on your application. Whether it will be taken into account depends on the bank employee. Creditors are reluctant to check credit history abroad, because it is cumbersome and expensive (the applicant would then have to bear those costs).
Tip: Although your foreign creditworthiness does not affect your credit history in the US, there is one exception to this rule. If your credit card (Visa, MasterCard, etc.) was issued by an American bank abroad, then American credit bureaus have information about it. That is why it is worth getting a credit card from an American bank before you leave for the US.
As a newcomer, you have no credit history in the US. You must build it from the ground up, step by step. Your creditworthiness in Poland is not taken into account by American credit bureaus or by American lenders.
How to Clean Up Your Credit File Yourself
The law known as the Fair Credit Reporting Act makes credit bureaus, as well as information providers, responsible for correcting inaccurate and incomplete information in your credit file.
How to Correct Errors
Mistakes can happen in millions of credit files. Another person’s data may appear in your file, and debts you have paid off may show up as late. If you believe certain entries are inaccurate, contact the credit bureau and the information provider – the bank, the credit card issuer, etc. Don’t call – write a letter!
A dispute letter should include your full name, address and phone number (the Federal Trade Commission publishes sample letters of this kind: consumer.ftc.gov). Enclose a copy of your credit report with the incorrect items circled. Explain which information is inaccurate. The letter should clearly identify each item you dispute, state the facts and explain why you are disputing the information, and request that it be removed or corrected. Enclose copies of supporting documents, not originals.
Send the letter by certified mail, return receipt requested. Keep a copy of the letter and all enclosures for yourself.
Credit bureaus must investigate the disputed items within 30 days, unless they consider the dispute frivolous. They must also forward your complaint to the institution that provided the information (for example, the bank).
When the bank (the information provider) receives notice of the dispute, it must conduct an investigation, review the information and send the results to the credit bureau. Information that the credit bureau cannot verify must be removed. If the bank finds that the disputed data is indeed inaccurate, it must notify the three credit bureaus so that they in turn can correct it in their records.
Problems with the Credit Bureau’s Investigation
Although the Fair Credit Reporting Act requires the credit bureau to conduct an investigation when there are problems with your credit file, these “investigations” are often very superficial and frequently do not resolve problems within the required time. Many people struggle with credit bureaus for years. Here are some of the reasons.
Some investigations are conducted by computer, not a live person, so the specifics of the problem are not passed on to the information provider (for example, the bank).
Even if a person rather than a machine handles your problem, it is often a low-paid, overworked employee who is not interested in learning the nuances of the case. This employee’s job is to send an investigation request to the information provider (for example, the bank), but if he does not explain the problem well enough or classifies it incorrectly, the bank will not learn why you believe the data is inaccurate.
When a bank receives an investigation request from a credit bureau, it will not necessarily put much effort into verifying the information. Most often, a bank employee compares the information disputed by the customer with the contents of the bank’s database and confirms the facts recorded there. If the entries in the database are wrong, the mistake will not be detected.
Even if you speak with an employee of the information provider (the bank) to correct errors, that employee may agree with you but fail to make the correction in the database.
End of the Investigation
At the end of the investigation, the credit bureau will give you the results in writing and – if anything was changed – a free copy of your credit history. This report will not count as the free annual report required by the FACT Act. In any case, you can now check your credit reports for free every week at www.annualcreditreport.com.
If an item in your credit file was changed or deleted, the credit bureau cannot put it back in your file unless the information provider certifies in writing that it is accurate and complete. The credit bureau must then send you a written notice that the previous information has been reinserted, including the name, address and phone number of the information provider.
At your request, the credit bureau must send a notice of the correction to every institution that received your credit report in the last 6 months. Corrected copies of your file must be sent to anyone who received your credit report for employment purposes in the last two years.
100 Words of Explanation
If the investigation does not resolve your dispute with the credit bureau, you can add a statement of dispute to your file, which will be included in all future reports. You can also ask the credit bureau to send your statement to anyone who received your report in the recent past. Expect a fee for this service.
Summary: With a copy of your credit report you will receive a dispute form, on which you can list the inaccurate items and explain why you consider them wrong. The credit bureau is required to verify the accuracy of the disputed information within a “reasonable time,” unless it deems the dispute “frivolous or irrelevant.”
Is There a Remedy for True Negative Information?
Some information in your credit report may be negative but true. Perhaps in the past you moved out of an apartment without paying the last month’s rent? Perhaps you owe money to a hospital or back taxes to the IRS? If you failed to pay your bills on time or received a judgment for payment (from a court or the IRS), be aware that this information may appear in your credit report.
You create some problems through your own carelessness. If you ever lent your Social Security number to a fellow countryman who used it and got into trouble, his actions may now be reflected in your credit file.
Only Time Will Help
Only time can remove information that is negative but true. Most information stays on your report for 7 years, and a personal bankruptcy for 10 years. In some situations there is no time limit. Negative credit information is reported without limit in the following circumstances:
- when you apply for a loan of $150,000 or more,
- when you apply for a job with an annual salary of more than $75,000,
- when you want to buy life insurance for $150,000 or more.
A standard method is used to calculate the 7-year reporting period. Usually this period starts from the date the event occurred.
New Accounts in Your File
Insufficient information in your credit history reflects poorly on your creditworthiness. But sometimes the history is incomplete and does not show all credit accounts. Most national department stores and general-purpose credit cards are reflected in your file, but not all. Sometimes travel, entertainment or gas cards, local retail stores or credit unions are left out.
If you were told that you were denied credit because of an insufficient or missing credit history (“insufficient credit file” or “no credit file”), and you have accounts with creditors not shown in your file, ask the credit bureau to add this information to future reports. Although credit bureaus are not required to do so, they may add verified data to your file for a fee. But remember that if these added creditors are not subscribers of the credit bureaus, this information will not be updated.
Beware of “Credit Doctors”
Don’t believe the promises of “credit doctors” or “credit clinics” who, for high fees, promise to clean up your credit file. They belong to a new breed of computer fraudsters. At best, they will do what you could do for yourself. At worst, they will steal the data of other people with a good history and sell it to people with the same names but a bad past. The result can be a mix-up of information with serious consequences. The person who bought a clean history (say, yours) will be able to take out a loan, but the payments may show up on your credit card.
Other companies, even law firms, promise to challenge the correctness of the procedure by which a negative report about you was filed with the credit bureau. They will gladly take a retainer and further installments. Remember that credit bureaus most often dismiss such complaints as “frivolous and irrelevant.”
You cannot remove true negative information from your credit history. For this reason it is very important to behave responsibly.
The fact that true and current negative information cannot be removed is confirmed by the Federal Trade Commission on its website: consumer.ftc.gov/articles/fixing-your-credit.
You can fix your credit problems yourself, without paying anyone. Just apply the knowledge you have gained from this article. The fact is, however, that an immigrant without a good command of English may need help.
Here is a list of organizations that can help resolve credit problems:
- National Foundation for Credit Counseling, tel. 877-360-6322, www.nfcc.org
- National Association of Consumer Advocates, tel. 202-984-7706, www.consumeradvocates.org
- National Consumer Law Center, www.nclc.org
- Public Interest Research Group (PIRG), www.pirg.org
Elżbieta Baumgartner has published advice books for Polish immigrants in the US since 1989, writes regularly for the Polish-American press, and gives talks on radio and television.
Updated October 2026.
