Understanding the US Credit Score: A Guide for International Students

Understanding and making yourself familiar with the financial systems in a new country is not easy, especially when terms like “credit score” begin to pop up. For international students in the US, understanding and managing credit scores is an essential step in building a solid financial foundation.

This guide breaks down what credit scores are, the factors that affect them, and how to build a strong credit score as an international student in the United States.

What Is a Credit Score?

A credit score is a three-digit number that represents an individual's creditworthiness. In simple terms, it’s a snapshot of how reliable you are in managing borrowed money. In the US, the most commonly used credit scores are FICO scores, which range from 300 to 850. Higher scores indicate lower credit risk, meaning lenders see you as more likely to repay borrowed money responsibly.

Here’s a quick breakdown of the FICO score ranges:

Excellent (800–850): Exceptional creditworthiness
Very Good (740–799): Above-average reliability
Good (670–739): Average or acceptable creditworthiness
Fair (580–669): Somewhat risky to lenders
Poor (300–579): Considered high-risk

For international students, establishing a good credit score opens doors to financial opportunities, including better rental agreements, lower insurance premiums, and lower interest rates on loans.

Why Is a Good Credit Score Important in the US?

A good credit score affects multiple aspects of life in the US. It’s not only essential when applying for credit cards or loans; it can also play a role in rental applications, utility setup, job offers, and even phone plans. In some cases, employers might check credit scores as part of the hiring process, as a strong score indicates responsible behavior and financial stability.

Since many services in the US are tied to credit, building a good credit score early on will make life as an international student much easier. Fortunately, credit scores are manageable if you understand the factors that influence them and practice smart financial habits.

Key Factors That Influence Your Credit Score

Understanding the factors that affect your credit score is the first step toward managing it effectively. Here’s a breakdown of the primary influences:

Payment History (35%)
Payment history is the most significant factor in your credit score. Consistently paying bills, loans, or credit card balances on time positively impacts your score. Late or missed payments, on the other hand, can significantly lower it.
Credit Utilization (30%)
This measures how much of your available credit you're using. For example, if you have a credit card limit of $1,000 and your balance is $300, your credit utilization is 30%. Keeping this ratio below 30% is ideal, as high credit utilization suggests a higher risk to lenders.
Length of Credit History (15%)
A longer credit history generally boosts your score, as it demonstrates financial responsibility over time. For students just starting out, this may be challenging, but building credit responsibly over time will help.
Types of Credit (10%)
The types of credit you have, such as credit cards, student loans, and installment loans, can also impact your score. A healthy mix of credit types shows lenders that you can manage different forms of debt.
New Credit Inquiries (10%)
Each time you apply for a new credit line, it results in a hard inquiry, which can slightly lower your score. While these inquiries are typically minor, frequent applications for new credit could make lenders view you as a higher risk.

How to Build and Maintain a Good Credit Score as an International Student

Building credit as an international student is possible with careful planning and responsible practices. Here are some steps to help you build and maintain a good credit score:

1. Start with a Secure Credit Card

Most students begin their credit journey with a secured credit card. A secured card requires a refundable deposit as collateral, which makes it easier to qualify for. As you use the card responsibly, you’ll gradually build credit and may eventually qualify for unsecured cards with better terms.

Some financial institutions, such as Zolve, offer credit cards specifically designed for international students, without requiring a Social Security Number (SSN) or credit history. This can be a major advantage in establishing your US credit profile sooner.

2. Make On-Time Payments

On-time payments are one of the most effective ways to build a good credit score. Setting up automatic payments or reminders helps ensure you never miss a due date. Remember, even one late payment can hurt your score significantly, so consistency is key.

3. Keep Your Credit Utilization Low

Aim to keep your credit utilization below 30% of your total credit limit. For example, if you have a credit limit of $500, try to keep your balance below $150. This shows

lenders that you’re not overly reliant on credit, making you a safer bet.

4. Avoid Applying for Too Many Credit Lines

Applying for several credit cards or loans in a short period can make you seem like a higher risk to lenders. Instead, focus on building credit with one or two accounts and consider new credit only when you genuinely need it.

5. Monitor Your Credit Report

In the US, you’re entitled to one free credit report each year from each of the three main credit bureaus (Experian, TransUnion, and Equifax). Regularly checking your credit report allows you to track your progress and catch any errors that could negatively impact your score.

How Long Does It Take to Build a Good Credit Score?

Building a good credit score doesn’t happen overnight, especially if you’re new to the system. It typically takes several months of on-time payments and responsible credit use to establish a respectable score. For students, achieving a score of around 670-700 within a year or two is a realistic goal with consistent financial habits.

Once you’ve established a solid score, continue practicing good credit habits. Over time, your score will improve, making it easier to qualify for better financial products and services.

Mistakes to Avoid While Building Your Credit Score

Missing Payments: As mentioned, payment history is crucial. Missing a payment can set your score back, so prioritize on-time payments every month.
Closing Old Accounts Too Soon: Length of credit history matters, so avoid closing your oldest accounts. Keeping accounts open, even with minimal use, can be beneficial.
Relying Too Heavily on Credit: Consistently maxing out your credit limit or relying too heavily on credit indicates financial instability. Try to keep balances low and use credit primarily for planned expenses.
Ignoring Small Debts: Small balances, like a $10 overdue balance, can impact your score if left unpaid. Even minor debts should be cleared regularly to avoid unnecessary dings on your credit.

Final Thoughts

Establishing a good credit score as an international student in the US takes time and disciplined financial habits. However, the rewards are significant, from improved rental opportunities to lower loan rates and better job prospects. With a sound strategy and consistent effort, you can build a strong credit profile that will serve you well during and beyond your time as a student.

For international students, tools designed specifically for newcomers, such as Zolve’s no-deposit credit card, can make building and tracking your credit much simpler. As you become more familiar with the US financial landscape, these resources can be invaluable in helping you reach your goals and navigate a new financial system with confidence.

How to build a credit score in the USA as an international student?
International students can start building a credit score by opening a secured credit card, making on-time payments, and keeping credit utilization low (ideally below 30%). Responsible financial habits over time, like avoiding too many credit applications, help establish a solid credit profile.

How to check a credit score for international students?
International students can check their credit scores through services like Experian, Equifax, and TransUnion. Many banks and financial institutions also offer free credit score access, allowing students to track their credit-building progress.

Do foreigners have credit scores in the US?
Foreigners in the US generally do not have a credit score initially, but they can establish one by opening credit accounts, making regular payments, and gradually building a history over time. Credit scores begin to form once financial activities are reported to credit bureaus.

Is 750 a good credit score in the USA?
Yes, a credit score of 750 is considered very good in the US. It generally qualifies you for favorable interest rates, better loan terms, and access to premium credit cards and other financial products.

Does credit score affect a visa in the USA?
Credit scores do not directly impact visa applications, as visa eligibility is primarily based on legal and immigration criteria. However, a good credit score can improve financial stability, which may indirectly support applications for certain types of visas, such as investor visas.

Disclaimer: The products, services, and offerings mentioned in this blog are subject to change and may vary over time. We recommend visiting our official website for the most up-to-date information on Zolve's offerings.