Starting from Scratch: How a Family Moved to America and Built Excellent Credit From Nothing

Janna Dor and her family have had an amazing journey through life and across the world. Her parents, Gavriel and Ester, and her younger brother, Imanuel, are from Dushanbe, Tajikistan, formerly part of the former Soviet Union. In 1990 the Soviet Union broke up, allowing the family to emigrate to Israel. Ten years later, Janna and her family became permanent residents of the United States through the annual green card lottery.

Finding a place to live, with no credit

Janna, who was 18 years old at the time, spoke nearly perfect English, and her parents relied on her to help them figure out life in America. “We asked my uncle in Denver, Colo., to look for a place for us that we could rent. He found us a perfect apartment near his house with two bedrooms, a gym and attractive grounds,” she said.

But when her family arrived in Denver, they were asked for their social security numbers, which they didn’t have yet. “When we told them that we didn’t have social security numbers yet, they asked us how they could look up our credit history or credit score. We didn’t have an answer for that either, as we didn’t even know at that time what a credit score or credit history was,” Janna said.

Janna’s family offered to pay six months’ rent in cash, plus a one-month deposit, but the apartment manager told them he couldn’t accept it. “My brother asked, ‘Why not? Cash is just as good as a credit card or a check, perhaps better.’ The manager’s response was, ‘Why should anyone have that much cash on hand? How do we know that you are not drug dealers?'”

Janna added, “We found ourselves in the position where we could not rent a place that was promised to us.” Without a social security number or a credit history, no one would rent to them so they had to stay at her uncle’s house. After three weeks of searching, they were able to find a very low-priced apartment complex that was willing to rent to them as long as her uncle cosigned the lease and they paid several months’ rent in advance.

Building credit in a new country

Janna and her family discovered they had what is called a “thin file” for a credit report. This means that there is very little information for creditors to gauge their risk, and this condition also presents problems when attempting to rent an apartment or establish utility service. As a result, they were unable to qualify for most new lines of credit, a mortgage or even most apartment leases.

Their difficulty in finding a place to live without a credit history or credit score left them dispirited, but determined. “First, we tried to open a bank account to deposit the little cash we had remaining, hoping that would help us to establish some kind of credit history,” Janna said, “only to find out that no bank would open an account for us without a social security number, which we were all still awaiting.”

Later, they learned that many employers wouldn’t hire them without first checking their credit, so they started looking into what they could do to get out of what was becoming a very uncomfortable situation. “The moment we got our social security numbers, we opened a bank account and we all started looking for work,” she said. “My parents initially started working as caretakers for elderly people and others with health issues, and I started working as a dental assistant.”

To begin establishing credit, Janna applied for – and received – a department store credit card in her and her mother’s names. Even though the card wasn’t affiliated with a major payment network, this first line of credit proved to be extremely valuable in establishing a credit history. “For the next year, this was the only form of credit we had,” Janna said. “We tried to buy all of our clothes at Sears, all of our appliances, and any tools we needed. At the end of the year, we decided to move out of the cramped apartment and try to buy our own home.”

They were preapproved for a home loan that appeared to have good terms, and they found a house that they liked. But when the family went to apply for the loan, Janna found that her father’s credit wasn’t sufficient, because his name wasn’t on the department store card. “We quickly got my dad a credit card,” she said, “but it was too late for the purpose of getting a house. So we ended up changing the application for the loan on the house to include just me and my mom, since we were the only ones with a credit history at that time. We bought the house with the intent of refinancing the initial loan within a year to get better terms as our credit improved, which our mortgage broker suggested.”

After Janna’s father had secured a better job and his own credit card, her parents tried to figure out a way to refinance their home loan to receive a better interest rate. It was then that they discovered their mortgage had penalties for prepayment – at the time, it was the only loan that they could be approved for with such a limited credit history, according to their mortgage broker.

The reach of credit history

According to Gerri Detweiler, Head of Market Education for and the coauthor of Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights, “Janna and her family learned the hard way that in the U.S., it often takes credit to get credit. They did many things right, but there are a few things they may have tried to speed up the process. They could have asked their uncle to add them as authorized users on one of his credit cards. If that card issuer reports to the credit reporting agencies, that payment history would have helped to establish and build their credit rating.”

Janna and her family now understood how important credit scores and credit histories are in the American financial system. “We already knew we couldn’t get a good job or a decent apartment — whether we’re looking in Denver or a cheaper city like Bloomington without a strong credit history, and this experience reinforced how important credit scores are to every aspect of a person’s existence in the United States,” she said.

The family then learned how to grow and maintain their credit history and scores. They started paying all of their credit card balances in full, and opened up other store credit cards when they were able. While in college, Janna opened a student credit card account. “It had a limit of $500, and I had to pay for my books $100 at a time, because that was all the money I was receiving from my college’s work-study program. My father took out a loan to buy a used car, which he paid on time every month like clockwork, further helping his credit score,” she said.

Eventually, after their loan’s prepayment penalty clause expired, they were able to refinance their house. By that time, her father’s credit had grown strong and he was able to take out a loan in his own name.

Learning about the American consumer credit system

Through their life in the United States, the family found out that many Americans have credit card debt, which was a very new concept to them. “When we lived in the former Soviet Union, we didn’t even have any kind of payment card, we just used cash,” Janna said. “In Israel, the payment cards worked more like debit cards do here. Credit was often extended by the merchants, not by the payment card issuers, and the concept of credit history and credit scores was foreign to us.”

As the family member with the best English skills, it ultimately fell on Janna to teach her parents and her brother how to build and maintain a strong credit history, and how important it is to every aspect of life in the United States. Janna and her family learned the hard way that it can be very difficult to overcome the so-called “thin file” situation that faces both new immigrants and those who have never had any credit in their own name. As she and her family started to learn about the credit system in the United States, and the numerous advantages of having a strong credit history, they were able to overcome many of the mistakes they initially made. Today, all her family members have credit scores in the mid-700s, just a few short years after learning what a credit score is.

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