Author and journalist Carmen Wong Ulrich joins host Barbara Bogaev to answer your letters this week.
Ricardo from Cincinnati, OH is a recent immigrant to the U.S. originally from Portugal. When he moved to the U.S., he found getting into the credit system a challenge. When he lived in Portugal, he was working and had a credit card as well as a loan on a house. But in the U.S., he's now at step zero. What's the best way he can break in?
"What you need to do is the same advice I give to students just getting out of college. In order to establish credit, use the tools that are available to you that actually don't give you real credit yet, but add onto your credit history. The easiest one is getting a secured card. It's specifically called a secured card because basically you put down a security deposit. That is your line of credit. You use that responsibly because it's reported to the credit agencies. Eventually the secured card extends you credit beyond that security deposit and you build your credit score and history with that. That's the way to do it with plastic," says Wong Ulrich.
She also advises Ricardo to look around for the best card and to look out for fees.
"Just make sure before you sign up that you call them directly and ask them, 'Do you report to the credit reporting agencies?' Now the other thing is that there's one little bit of good news about credit reports is that now they're going to start looking more at things that are not tied to plastic. For example, your rent. Paying rent on time. This is really good news, especially say for students, people who haven't owned a home. They are going to start reporting that and that will fall into your credit history."
For more advice, including a conversation about estate planning for young families and student loan forgiveness for teachers, click play on the audio player above.