Can undocumented immigrants apply for a credit card?


After arriving in the United States, an undocumented immigrant must deal with many things that are foreign to him. Among them: the US financial system, which can be difficult to navigate even for those born in the United States.

Getting a credit card can be one of the items on an undocumented immigrant’s financial to-do list. Undocumented immigrants can apply for a credit card in the US, but they may have to jump through some hurdles to do so. These could include obtaining a federal tax identification number or qualifying for a secured credit card.

“Many people we talk to in the immigrant community have difficulty accessing credit because they haven’t had access to financial education about their rights in the financial system,” says Adina Appelbaum, immigration attorney, accredited financial counselor, and co-founder of Immigrant Finance.

Immigrants tend to rely on high-cost alternative financial services, such as check cashing companies, payday lenders, and pawnbrokers, at great expense. Meanwhile, services from traditional banks tend to be much more reasonably priced. An undocumented immigrant’s financial education should focus on high-cost alternative financial services, says Magnus Larsson, co-founder and CEO of Majority (a digital bank for immigrants).

Do you need a Social Security number to get a credit card?

No federal law prohibits an undocumented immigrant from obtaining a credit card in the US, Applebaum explains.

Based on their corporate practices, some credit card issuers require the applicant to provide a Social Security number. However, many credit card issuers accept a individual tax identification number as an alternative to a Social Security number. The nine-digit ITIN, while similar to the nine-digit SSN, is issued for tax purposes and does not authorize you to work in the US or qualify you for SSN benefits.

Even with an ITIN, an applicant may not be approved for a credit card if they have no credit history. Not having a credit history is not inherently bad, it just means that you have never used any credit-building financial products, such as a credit card or loan, in the US.

If a Social Security number or ITIN is not an option, some credit card issuers may accept the applicant’s foreign passport or US driver’s license. Yet another alternative is Nova Credit Credit Passportthat an issuer can use to view an applicant’s foreign credit history.

Credit card issuers that do not require an SSN

Credit card issuers that do not require an SSN include:

  • American Express
  • Bank of America
  • capital one
  • To pursue
  • citi

How an undocumented immigrant can apply for a credit card

Contrary to popular belief, there are many alternative ways an undocumented immigrant, with no credit history on record in the US, can obtain a credit card.

Get a secured credit card

Unlike an unsecured credit card, a secured credit card generally requires a cash deposit to serve as collateral. The guarantee protects the card issuer by guaranteeing the payment of any debt that he may accumulate on the card. The credit limit for one of these cards is usually 50 percent or 100 percent of the deposit amount.

The purpose of a secured credit card is to help someone build their credit history and then move on to a traditional unsecured credit card. Most, but not all, secured credit cards report the cardholder’s payment history to the credit reporting agencies, which slowly helps your credit score grow. If this information is not reported, your credit score will not increase, so be sure to apply for a secured card that regularly reports your payment activity.

Ask someone to cosign

Another way to get a credit card is to find a co-signer. Under this agreement, another person (often a relative) agrees to cover the card payments or the entire balance if the primary cardholder is unable to do so. However, keep in mind that many major credit card issuers do not allow co-signers.

Become an authorized user

You can also request to be added as an authorized user on someone else’s credit card. As an authorized user, you get your own card connected to the primary cardholder’s line of credit. This allows you to use the card to spend and enjoy the benefits of the card.

The account holder is financially responsible for the monthly card payments and the full card balance, although of course you can make arrangements with the primary cardholder to pay your balance each month. The person whose card account you link to is usually a spouse or relative, but a friend is also possible, as long as they are trustworthy and financially responsible.

If you or the primary account holder make payments on time each month, it will reflect positively on both credit reports, since payment history is regularly reported to the credit reporting agencies. It could be quite advantageous for both parties. Some credit issuers do not report authorized user activity, so make sure your issuer does before you become a user.

Request a joint account

Another option is to apply for a joint credit card account with someone else, such as a spouse or family member, which essentially makes you both the primary cardholder and responsible for covering the balance. The main attraction: perhaps with the income from both, the issuer will feel more confident in extending credit to you.

As with an authorized user, the payment activity of each joint account holder is generally reported to the credit bureaus. Therefore, if payments are made on time and regularly, it is possible that your credit history will be strengthened. However, keep in mind that many card issuers no longer offer joint credit accounts.

Get a credit card with no credit history

Some card issuers may be willing to approve an undocumented immigrant for a traditional unsecured credit card, even if they have no credit history. However, it’s worth noting that cards with no credit history can have drawbacks like a higher-than-usual interest rate or a lower-than-usual credit limit. However, if you’re diligent about not overloading your card and paying your bills on time each month, these cards work just as well for building your credit.

Applebaum says that in many other countries, credit is used less often than it is in places like the US So an undocumented immigrant can come to the US with no credit history.

“For immigrants who have credit histories from their home countries, many can’t transfer their credit histories once they arrive in the US, so they have to start from scratch,” he says. “In addition, people who do not have immigration status or who have uncertain and temporary types of status or are interstate may have difficulty opening credit cards and not knowing if they are eligible to have them in the first place.”

How to build credit as an undocumented immigrant

“Learning how to manage a credit card responsibly and pay it off in full every month over time is one of the best ways to build a strong credit score through payment history and length of credit history,” Applebaum says.

Payment history accounts for 35 percent of your FICO credit score, the most widely used scoring model, while length of credit history accounts for 15 percent. Here are some other tips you could try to build your credit:

  • Open a bank account in the US Some credit card issuers may require the applicant to have a US bank account.
  • Pay all your bills, like rent and utility bills, on time every month. Not only will you get in the habit of paying your bills regularly, but you’ll also be able to include those payments on your credit report through Experian Boost.
  • Maintain a low total amount of debt. The amount of debt you owe relative to your total credit limit, also known as your credit utilization ratio, accounts for 30 percent of your FICO credit score. “Don’t get sucked into the spiral of expensive credit,” advises Larsson.
  • Consider transferring your credit history from your home country to the US. Larsson says credit card issuers “need to go beyond the existing credit scoring system” to account for disadvantaged consumers like undocumented immigrants.
  • Avoid applying for too many credit cards at the same time. Those with credit scores will experience multiple difficult inquiries, which will lower your score by a few points. As for people with no credit, you shouldn’t apply for too many cards at once: lenders will think you’re in financial trouble and a higher credit risk.
  • Stay away from payday loans. The APR for a payday loan can be 400 percent or more, which is well above the typical APR for a credit card or personal loan. Larsson calls payday loans an “evil” form of credit that preys on undocumented immigrants.

The bottom line

Working in the US financial system as an immigrant, including the process of obtaining a credit card, can be intimidating. “The system is not designed for people who weren’t born and raised here when it comes to finances,” says Larsson.

Fortunately, credit cards are available to undocumented immigrants, although they can be difficult to qualify for. And “there are no shortcuts,” explains Larsson.

You don’t necessarily need a Social Security number to qualify for a credit card. Additionally, there are several credit options available to undocumented immigrants hoping to obtain a credit card. These include a secured credit card, which requires a cash deposit, or a credit card designed for someone with no credit history. By putting in a little work during the application process and being responsible with credit, an undocumented immigrant can join the more than 80 percent of adults in the US who have credit cards.


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