In the US for 6 months: should I do something for a future good Credit Score?

Question

My wife and I – both western European in our late 20's – are in the US for 6 months, as visiting scholars (J1 and J2 visas, respectively). We currently do not (nor need to) interact with any US financial institution, since we're paying everything through our N26/Revolut accounts.

Even if we do not aim to stay in the US right after our stay, we might however come back for professional purposes in the foreseeable future (i.e. in 1 to 5 years).

Are there initiatives we could take now in order to have a good credit score when we'll come back? (e.g. opening an account now to start building a credit history)

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_{Some more background: We're both western European in our late 20's, are doing a PhD, and have currently no debt/credit. We spend money sensibly (less than what we earn on a one-moth period), and have debit card only. We do not have any incomes from the US.}

Answer 1

You could conceivably open a few accounts. For example, a bank account and a credit card account. Then the accounts will be older when evaluated for credit when you return. This would look better than opening fresh accounts later. But don't expect a big difference in score. And you'll be stuck with those accounts in the future, otherwise you lose the benefit. I wouldn't worry about maintaining balances now. You can wait until you come back. Occasional purchases may be helpful.

What they really want to see is a regular and sustained use of accounts without missing payments or overextending. But if you're not going to be here, you can't really do that. Note that good credit scores are based on seven years of data, preferably a lot of it. Opening a few accounts can't substitute for that, even if you put balances on them.

If you're not here, you won't be paying rent or utilities. You won't have a proven payment history on the most common accounts.

If money were no object, you could do something like purchase a house or condo that you could rent out, utilities included. That would build up a payment history. But if money were no object, you probably wouldn't be worried about your credit score. It's more practical to just live normally and be sure that you always live within your means so that you don't experience negative credit events.

You might think about why you want a good credit score. Is it to borrow a lot of money? You might be able to spend money to achieve that. Is it to save money on future borrowing? If it costs money now, how much will you save total?

Opening accounts now that you won't really use until you return is about the only thing that you can do that won't cost you money. Perhaps put a balance on the bank account--at least you'll get that money back some day. Maintaining a balance on the credit cards would cost you money in interest charges, and you don't really benefit from an improved credit score until you use your credit. So the interest fees aren't really buying you anything.

Answer 2

In six months, there is little you can do that will significantly affect your future credit rating other than trying to avoid paying for something by leaving the country. As we keep telling people, the best things you can do for your credit rating are to have a good income and Don't Be Stupid about misusing credit.

Answer 3

If you are assigned a US Social Security number, you can apply for credit while you are here. Making small purchases and paying them off will help with your length of credit history, which is a part of FICO, but inactivity will eventually lead to those accounts being closed.

Additionally, many revolving credit companies will charge you annual fees to keep your accounts open, and will require you to maintain a US address, and most want a residential address, not a mail-drop or PO Box.

TL;DR: you can do it, but it will likely require an investment of both in time and money that won't make it worth it.

Footnote: If you plan on opening US banking or investment accounts, there are regulations that make it difficult for foreign nationals to maintain accounts due to IRS categorization of US Taxpayers vs Foreign Nationals. Unless you have a lot to invest or deposit, most firms won't want to bother with Foreign taxpayer certification (see w8ben).