How to establish a credit rating

[kmetzger]

I'm a US citizen who has lived in Mexico for the past 7 years. I'm a freelance translator earning about $23,000 a year mostly from German sources and a $16,000 US civil service annuity.
I'm interested in buying a new car in the US, but I've been told that I have no credit score - nothing comes up.
Every year I file a federal income tax return declaring foreign earned income, the profit from my freelance business and pay self employment tax.
The only official document I have showing my income is my W2 showing the annuity I received.
Is there any official documentation I can receive from the IRS showing the foreign earned income I declared?

Thanks in advance for your comments.

(Mr.) Kim

[34saving]

This may be a long shot, but are you paying social security? If so, they should send you a statement every year with your income . . .

[kmetzger]

I never thought of that. It's one official document, at least, that I could submit to a bank. Thanks a lot!

[neatdesign]

Earning income may help you pay the bills, but it is pretty unrelated to your credit history. I work for a credit card company. I've come across many applicants who are working and have been for some time, but because they've never had a credit card they have no credit history and are declined.

The tricky thing about credit is it's a chicken-and-the-egg situation. You can't get a credit history without credit cards/loans, and you can't get credit cards/loans without a credit history.

You might try applying for a store credit card or even a secured credit card, making purchases and making monthly payments on them, for at least 6-12 months, which can be reported to the credit bureaus. It takes time to build up a credit history, but it can be done.

An alternative is to ask someone you know and trust -- and who has good credit history -- to add you to their account as an authorized user or joint cardholder. That way their account's history starts being being reported on your credit bureau reports.

This is what my husband and I did. When he emigrated from the UK, his British credit history stayed behind in England; it is not transferrable to the States. I added him to my credit card account, and within 3-4 months he had an established credit history by riding on my coattails. Using advice from other British expats he has waited to apply for credit in his name only; it's usually good to wait a minimum of six months.

~ Jenney

[gakline]

Another thing to do is get a small loan from a bank in the US. Say for about a $1000 and pay it back gradually over 6 months or so. Tell them your predictament and they will gladly help you out too.

[dealsaver]

This wouldn't help op, but a nice way to develop a credit history is to be added as an Authorized User on someone's existing account. You can do that for your children, never tell them, and then they will have a long credit history by the time they reach 18.