In a country that relies on credit to build wealth and achieve financial prosperity, it’s important for everyone to understand personal finance concepts. This includes new immigrants and first-generation Americans who may be unfamiliar with banking, establishing credit and filing taxes. In communities with large immigrant populations, financial literacy resources and support are often available from local advocacy groups.

Those who arrive in the United States as refugees or humanitarian migrants, however, face particular challenges. They must quickly resettle in a new home while navigating unfamiliar systems with limited English proficiency and often no prior experience with credit. A lack of credit history can impede the resettlement process and prevent access to mortgages, car loans or other products that can help build wealth. Stakeholders reported that this can have long-lasting consequences for family and household financial stability.

Federal law prohibits discrimination based on national origin, yet many banks decline to approve applicants for credit cards because of their lack of credit history. For those who have the opportunity, getting a credit card and consistently paying on time are important steps to building a strong U.S. credit score, which can help them access better mortgage rates and rent apartments as well as secure employment or security clearances.

In the meantime, some credit unions offer safe “credit-building” accounts to people who don’t have a history in the United States, and community development credit unions serve low-income immigrants who don’t speak fluent English or have documentation. Moreover, some non-profits and community organizations are experimenting with alternative models that could enable individuals to build credit, such as reporting rent payments to credit agencies (typically only mortgage payments are reported) and offering a cosigner option for those who can’t secure an individual loan on their own. new immigrant finance