How Credit Works

SelfScore is dedicated to helping International Students better understand and benefit from the U.S. financial system. This is a quick guide to credit history and how SelfScore can help you.

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How Credit Works

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Why Credit is Important in the U.S.

The U.S. economy is built upon credit, and ultimately, credit boils down to trust. When a bank gives you a credit card or a loan, they do so because they trust you to pay them back, and one of the most common ways people build that trust is by using credit cards and paying their credit card bills on time.

How to Use Your First Credit Card

How it can help you now

The immediate benefits of having a credit card are extra purchasing power and flexibility. If you are a bit short at the end of the month, before your next wire transfer arrives, a credit card can help you pay for things. And many things in the U.S. like booking travel, using UBER, or renting a car require a credit card.

How it can help you later

Over time, using a credit card is essential to building your credit score and securing your financial independence. By demonstrating that you can pay back the money you borrow, in small or large amounts, you’re establishing your credit history which is reflected by your credit score. Your credit score is a grade for your financial performance, just like the ones you get at school. That grade matters to banks who determine your interest rate, to landlords who are deciding whether or not you will be responsible with your rent, and insurance companies who are setting your monthly payments.

What makes SelfScore different?

Most international students are caught in a catch-22: they don’t qualify for credit because they lack a U.S. credit history; and to build a credit history they first need to get credit.

SelfScore is different. We use alternative data sources to measure an applicant’s credit potential versus their credit history. We look at things like passport and visa to validate a person’s identity and status as an international student. We look at where you are studying and what you are studying to assess your credit potential. And we validate that you have a U.S. bank account with sufficient funds to pay your credit card bill.

How does it build my credit history?

When you are approved for a SelfScore MasterCard and use it, we report your payment history to the credit bureaus. The bureaus store your credit and payment history, even before you have a social security number. When you get a social security number, this history is appended to your personal credit file and you receive your first FICO score. Once this happens, your FICO score is accessible to you, as well as banks and lending institutions.

So by using your SelfScore MasterCard, and paying your bills on time, it helps you establish and build your credit score in the U.S.

How SelfScore makes money

The primary way we make money is through interchange. Put simply, when you use your card to buy things, pay for a meal, or pay your bills, the companies you make payments to pay us a small percentage of every transaction using our credit card. All credit card issuers make money this way.

We also make money when you carry a balance on your credit card from month to month via the Annual Percentage Rate. This is called a revolving balance, and, again, all credit card companies make money this way.

But unlike other credit card companies, we encourage you to pay off your bill monthly to minimize the interest we charge you.

And unlike other credit card companies, we take extra steps to help you avoid paying unnecessary fees. For example, at SelfScore we excuse your first late payment and we don’t have any hidden fees. Our mission is to provide you access to credit, then help you learn about good credit practices so you can build your credit history and take control of your financial future in the U.S.