Fact Checked

Immigrants could be required to show credit reports, scores if they want to stay in U.S.

Concerned woman looks at her computer. Image: Concerned woman looks at her computer.

Editorial Note: Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our marketing partners don’t review, approve or endorse our editorial content. It’s accurate to the best of our knowledge when posted. Availability of products, features and discounts may vary by state or territory. Read our Editorial Guidelines to learn more about our team.
Advertiser Disclosure

We think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.

Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates.

Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can.

Under a newly proposed rule aimed at immigrants, building credit could make the difference between gaining permanent residency or having to leave the country after their visa expires.

To help ensure that immigrants can “support themselves financially and will not be reliant on public benefits,” the Department of Homeland Security has proposed stricter requirements for immigrants seeking an extension to stay in the U.S. or a change of their status.

The law currently allows DHS to consider financial status, health, education, skills and age. The new law would allow DHS to take an immigrant’s credit reports and credit scores into consideration.

Although immigrants with bad credit could find it more difficult to qualify for a green card, those who didn’t have enough information to generate scores would not necessarily be disqualified. They would be given other opportunities to show that they pay their bills on time and are not struggling with debt.

Want to learn more?

What’s the background?

With the introduction of this proposal, the Trump administration says it is looking to ensure immigrants can support themselves while living in the U.S.

“Under long-standing federal law, those seeking to immigrate to the United States must show they can support themselves financially,” Homeland Security Secretary Kirstjen Nielsen said in a statement. “This proposed rule will implement a law passed by Congress intended to promote immigrant self-sufficiency and protect finite resources by ensuring that they are not likely to become burdens on American taxpayers.”

The green card application process already takes into account immigrants’ financial status — for example, whether an immigrant receives cash assistance from the government through programs such as Temporary Assistance for Needy Families or Supplemental Security Income.

But the proposed rule would broaden the definition of “financial status” to include credit reports and credit scores. Non-cash government benefits like food stamps and housing vouchers would also be factored in. The DHS would continue looking at other factors like an immigrant’s health, education, skills, age and family status.

One thing to note: Traditionally, immigrants don’t become eligible for government assistance until they live legally in the United States for more than five years or are a permanent resident. So while the proposed rules may affect people in those circumstances, they would not apply to illegal immigrants who are not eligible for public benefits in the first place.

What are people saying?

The Trump administration argues that immigrants should be self-sufficient. By factoring in their credit history, DHS believes it can better predict whether immigrants will rely on government assistance.

Supporters of the plan say the current requirements for immigrants to receive government benefits are too lenient and that the proposed changes are long overdue.

But critics say this will discourage low-income immigrants from seeking help when they most need it. They worry that some immigrants may go hungry or become homeless out of concern that applying for government assistance could hurt their chances of qualifying for a green card, which grants a foreign national permission to reside and be employed in the U.S.

Why does it matter?

These proposed green card rules could make immigrating to the United States more difficult.

Under the plan, the DHS estimates that 2.5% of immigrants eligible to receive public benefits like food stamps wouldn’t apply out of concern it could affect their eligibility for a green card.

This could save the federal government an estimated $22.7 billion over the next decade, according to the DHS. But it would also make the immigration experience even more difficult than it already is for many low-income people.

In addition, the application process would become more time-consuming. For example, the government estimates it would take four and a half hours for each immigrant to fill out a new form that demonstrates self-sufficiency. By filling out this paperwork, instead of working, these immigrants would lose an average of $47.97 in income, according to DHS estimates. That might not sound like much, but to someone living on a low income, it could be the difference between a meal or going hungry.

What can you do?

If applicants don’t have an established credit history, DHS says immigrants may provide “evidence of regular and timely payment of bills, and limited balances on credit cards and loans.” But if you’re intent on building your scores, you have options.

First, you might want to considering applying for a secured credit card, which requires a refundable deposit that the credit card company holds as collateral. You could also ask your friends and family members to make you an authorized user on their credit cards. Regardless, once you obtain credit, it’s important to keep your balance low and make on-time payments.

Last but not least, whether you’re an immigrant or not, if you’re passionate about the issue, you’ll have 60 days to file a public comment from the time the Department of Homeland Security officially publishes the rule in the Federal Register. You can do that by visiting regulations.gov and searching for DHS Docket No. USCIS-2010-0012.


About the author: Tim Devaney is a personal finance writer and credit card expert at Credit Karma. He’s a longtime journalist who prides himself on being a good storyteller who can explain complex information in an easily digestible wa… Read more.