My family came to the US to start a new life. An obscure credit score held us back
My family’s first home in the US was a two-bedroom suite at the Budget Inn La Puente in Los Angeles’ Walnut Valley. Every morning, my three siblings and I would jump on the sickly green bedspreads, chug Tropicana from the mini fridge and dash out the door. We’d play in the hallway or scamper out to the sun-baked sidewalks to marvel at the passing American cars. When police sirens blared down Francisquito Avenue, mom and dad would run outside, frantically waving us back in.
My parents had little choice but to stay at this motel because it was at a walking distance from our church, a largely Thai congregation for which my dad had moved from Malaysia to help run. We depended on the church for rides to the bank, advice on which car dealerships sold to immigrants and so much more.
That’s because my parents couldn’t open a bank account, buy a cell phone, buy a van or rent an apartment without great difficulty. It wasn’t due to a lack of funds. Although my dad’s vocation was as a pastor, during the daytime he worked as an engineer. The Los Angeles firm that hired him sponsored his H-1B visa, gave him benefits and paid him decently. My parents both spoke fluent English, held bachelors degrees from the UK and Australia and arrived on US soil with $20,000.
But these advantages amounted to little because their Fair Isaac Corporation (Fico) credit score was a big, fat zero.
A Fico score is your financial report card, and a prerequisite for any financial future in the US – from renting an apartment to buying a car or starting a bank account. Your Fico score, calculated by credit agencies and regulated by the US government, tells lenders if you can be reliably trusted to pay your bills. New immigrants must navigate a convoluted path to secure one.
The score only pulls credit history from the US, creating a huge barrier for new immigrants trying to establish stable lives. The credit history my parents built for more than two decades in Malaysia – through credit cards, home ownership and paying off their car – amounted to nothing here.
Thus ensued a chicken-or-egg conundrum.To build a score, my parents needed to create a reliable history of US-based payments – mortgages, retail instalments, credit cards – but institutions wouldn’t trust them with these financial obligations without an established score.
It’s no wonder that nearly 36% of foreign-born noncitizens do not use mainstream credit, compared with only 18.5% of the US-born population, according to a 2017 FDIC national survey. The agency also reports that about 51% of foreign-born noncitizens are either unbanked or underbanked.
My family came here with resources and a head start, but for people with less income, less English fluency or no documentation, it can be even harder to access mainstream financial institutions. It forces many new immigrants to rely on their informal networks to meet basic needs such as housing, getting a car and cell phone service.
‘I was a professional, but they didn’t treat me like one’
My parents’ quest to build up their credit began in bank lobbies. They dragged our family of six from bank to bank, facing a string of rejections. They finally found a Washington Mutual branch that let them open an account without a credit score. Still, we spent hours languishing in that sparsely furnished lobby, waiting as my dad tried to convince the bank specialist to issue him a credit card. I remember watching my dad sit behind a glass door, shaking his head in confusion. He presented pay stubs from his job as an engineer. All they would allow was a prepaid card.
To this day, the indignity of that experience rankles my father. “It was very frustrating to be treated this way,” he told me on a recent call, his voice rising. “I was a professional, but they didn’t treat me like one.”
My dad finally found a credit card company that would recognize his credit history from abroad – American Express – but for everything else, like other immigrants, we relied on our