Work on building credit history while studying in the U.S. to help with housing.

Build Financial Credit as an International Student

Building credit takes on-time payments, but there are ways international students can start.

Work on building credit history while studying in the U.S. to help with housing.
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International student Nikita Sachdeva, who studies economics at the University of Chicago, was intimidated by using credit and bank cards when she arrived in the U.S. from India.

In the beginning, the college student says, she was scared to use her card at small, unheard-of restaurants and cafes and unknown online stores and websites out of fear of credit card fraud.

[Avoid the mistakes new international students make.]

In the U.S., credit and debit cards issued by the bank are often used instead of cash. "The cashless culture was a whole new thing for me, especially because in India the society still runs on cash," says Sachdeva. "So, I had to adapt myself to using credit [and] debit cards."

For many international students, there's a period of adjustment to get used to the U.S. credit system, says Robert Hardin, assistant director of admissions for international recruitment at the University of Oregon.

Building a credit history of on-time payments is a necessity for living in the U.S., including to secure housing and utility services, he says. The following are expert tips for acquiring housing and building credit as an international student.

1. Get a credit card that's specifically for international students: "Getting a credit card was not very hard," Sachdeva says, because the university has an arrangement for international students. "In my case, student leaders from UChicago took a group of international student to Citibank, and we filled out some forms and received the cards within the next two weeks."

[Find campus resources that can help international students.]

At the University of Oregon, students generally build credit by opening a bank account that also comes with a small line of credit – typically $500 – an account very similar to a credit card, Hardin says. The credit limit, the maximum amount that can be borrowed, increases over time as a student builds a history of on-time payments.

There are also options for students who don't have a direct arrangement with a bank. Beverly Harzog, a credit expert and the author of "Confessions of a Credit Junkie," recommends cards for newcomers to the country such as the Capital One Cash Rewards for Newcomers credit card.

Students can apply to the company for the card, which offers people with limited credit the opportunity to build credit but carries a relatively high interest rate.

2. Manage card balances wisely: "I have seen many of my friends overspending because of credit [availability] and not paying their balances on time," Sachdeva says. "It is important that students understand that when one uses a credit card, one ends up owing the money."

According to Harzog, students should avoid charging more than 30 percent of their spending limit. So if they're offered a credit card with a maximum spending limit of $300, they shouldn't charge more than $90 in any one-month time period.

[Avoid credit trouble with our guide for credit card newbies.]

3. Choose housing friendly to international students: Start off on campus. "We encourage students to live on campus for at least their first year," Hardin says. "This allows them to become familiar with the campus as well as build up their credit before they move off campus."

When international students are ready to look for an apartment off campus, they should choose a property management company that understands international students, Hardin says.

"These companies know that a credit check for an international student will not return much information," he says. "Instead, they just rely on the standard deposit."

When student Sachdeva secured her apartment, she was asked for her passport and Form I-20, the eligibility form to study in the United States for international students, instead of a credit check and a Social Security number.

For more international student tips and news, explore the Studying in the United States center.