Green Card Applicants May Soon Need a Good Credit Score
This post is a guest post by CitizenPath, an online provider of immigration solutions.
Applicants for permanent residence in the United States must show that they won’t be dependent on public resources in order to qualify for a green card. This has been the norm for many years. But now policy makers for the Trump administration are taking it to a new level.
Under a U.S. Department of Homeland Security proposal, a variety of measures are intended to screen out more applicants who may become a “public charge.” The strategy isn’t an anomaly. The Trump Administration has voiced its desire to reduce immigration, and the U.S. State Department has recently made changes to public charge instructions in the Foreign Affairs Manual (FAM) that are more restrictive.
The Immigration and Nationality Act already defines several grounds of inadmissibility. The proposal seeks to change the way the Department of Homeland Security (DHS) determines if a foreign national is inadmissible in the United States. It could affect foreign nationals who seek to adjust status, obtain a visa, or even seek an extension of stay or change of status.
How Public Charge is Determined
Immigration law (INA §212 (a)(4)) provides the framework for how immigration officials make decisions on inadmissibility due to public charge. U.S. Citizenship and Immigration Services (USCIS) defines public charge as an individual who is likely to become primarily dependent on the government for subsistence such as receipt of cash assistance or long-term care at government expense. Applicants who are likely to become a public charge have historically been inadmissible as permanent residents. A USCIS officer must consider the following factors when making a public charge determination:
- Family status
- Financial status
- Education and skills
Of course, many intending immigrants who move to the United States are starting over and must find a job. Thus, most family-based immigrants and some employment-based immigrants must submit Form I-864, Affidavit of Support, to overcome the public charge inadmissibility. The I-864 affidavit is a contract of sorts. It is typically signed by a family member that promises to repay the U.S. government if the intending immigrant should ever depend on certain public resources.
Other immigrants are not subject to this public charge test. They include refugees, asylees, survivors of trafficking, domestic violence and other serious crimes, and other humanitarian-based applicants.
How DHS Says They Would Use the Proposed Rule
Some of the new criteria which DHS proposes to use in evaluating a foreign national’s financial liabilities or past reliance on public benefits are credit history and credit score. USCIS would generally consider a credit score characterized as “good” or better to be a positive factor because it suggests an applicant may be self-sufficient and less likely to become a public charge.
FICO credit-scoring models generally range from 300 to 850. This would mean that a score of approximately 670 or better to be desirable for immigration purposes. Anything below this range could adversely affect a person’s application for permanent residence.
Other positive factors could potentially overcome a negative credit score or lack of score. However, it’s not clear to what degree DHS will use the rule to deny applications that would have been approved in the past.
While having a credit score which is good or better may not be a prerequisite for obtaining permanent residence, it does put a heavier burden on the intending immigrant to present a positive financial profile.
The proposed rule also prescribes more scrutiny of past use of public benefits. It requires immigration officers to consider the use of public benefits to be “heavily weighed negative factors” for adjustment of status applicants. The rule would also give more discretion to USCIS officers to deny applications for those who have sought public benefits in the past or may be likely to seek benefits in the future.
Problems with Credit Reporting and Scores
Using credit history to evaluate the likelihood of a person’s future use of cash assistance or long-term care at government expense is problematic.
Not everyone has credit and most new immigrants have no credit history in the United States. Young adults generally have no credit or minimal credit histories. That’s normal. Likewise, individuals who recently came to the United States usually won’t have any credit history. Foreign nationals who have excellent credit history in a previous country cannot transfer that history to the United States. U.S. credit reports only contain information on U.S. lenders and creditors. Over time individuals can build a new positive credit history in the United States, but it takes time. With an active strategy to build good to excellent credit history, it may take one year or more.
A U.S. credit score (often called a FICO score) is a number that rates a person’s credit risk at a point in time. It is a factor that can help creditors determine the terms and extent they want to offer additional credit. Because the score is a snapshot in time, it is susceptible to short-term disturbances. For example, making a large purchase that uses much a person’s available credit can temporarily reduce a credit score. Likewise, new accounts (as would be typical for someone establishing a new residence in the U.S.) could negatively disrupt a score for a period of time.
Additionally, credit reporting could expose the applicant in other ways. Credit reports contain information about a person’s bill payment history, loans, current debt and other financial information. But the report may also contain information about employment, residences, lawsuits, arrests and bankruptcies in the United States. Although not specifically addressed in the proposal, this information could potentially be used to deem an applicant inadmissible under other grounds. No doubt this has immigration attorneys concerned about the possibilities.
A Final Rule is Pending
DHS published the proposed rule last year. The public comment period has ended. What follows will likely be a final rule that looks much like the proposal unless comments from the public, including immigration advocates, has effectively reshaped the language.
Under the proposed rule, certain adjustment of status applicants would be required to file a new form (I-944, Declaration of Self-Sufficiency) to facilitate the public charge inadmissibility determination by USCIS. Specifically, intending immigrants who are deemed as public charge, will be required to file Form I-944 and possibly even post a bond or cash deposit in order to overcome the public charge ground of inadmissibility.
Strategies to Improve Your Position
The proposed rule was already published in the Code of Federal Regulations and has completed a 60-day public commentary period. It isn’t official policy yet. However, if you anticipate adjusting status to permanent resident or extending your stay in any way, there are things you can do to improve your credit profile. Building credit takes time. Take small steps now to build credit over the long term:
- Apply for a Social Security Number (SSN): Request a Social Security Number from the Social Security Administration. In most cases, only immigrants authorized for employment in the U.S. can obtain an SSN. If you are not eligible for an SSN, you may request an individual taxpayer identification number (ITIN). An ITIN can substitute for an SSN until you get one. Banks and credit card companies also use the SSN (or ITIN) to report credit history. Credit agencies build your profile and score around these uniquely assigned numbers.
- Open a Secured Credit Card: Individuals with little or no credit history will generally have difficulty opening a line of credit. Banks consider you a risk simply because they don’t know anything about you. You can mitigate this risk by offering collateral. With a secured credit card, you make a deposit and the credit card company typically issues a card with a spending limit equal to the deposit. In effect, you are borrowing your own money. However, in the process, you are building a credit history. If you use it responsibly, you’ll establish a positive credit report and credit score.
- Open a Credit-Builder Loan: A credit-builder loan is an effective way to develop positive credit history. The lender deposits a small amount of money into a secured savings account on your behalf. It’s a loan that stays deposited in your savings account. Then, you pay off the loan in monthly payments. After the loan is paid in full, the money in the savings account is yours to use as you please. You’ve grown your personal savings and established positive credit history.
- Responsibly Manage Accounts: As you have the opportunity to open additional accounts, maintain good habits to prove you are a reliable borrow who can be trusted. Pay your bills on time. Rent, utility and other credit accounts could be shared with credit agencies. Always be mindful of your credit limit. Using too much of your available credit can work against you. Nurture these accounts over time. Length of credit history is also an important factor in a credit score.
It may take several months for immigrants with no credit to build a positive credit report. Generally, it takes at least three months and perhaps six months of activity before a credit score can be calculated. Individuals who actively build a positive history are able to develop a good score within a year.
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