Social Security Numbers & Credit Score

Click here to get the SSN explained

You've probably heard in movies people talking about their "social", or "SSN", or "so-sh" or "social security number" and wondered what exactly that is. Well, it's similar to a Tax File Number in that you need it to file taxes, but there's so much more to it! 

The Social Security number, also known as an SSN, is one of the most valuable numbers to have in America. It consists of 9 numbers and is usually written as 123-45-6789 and outside of the first time when disclose your full "social" to a company, you will normally identify yourself with your "last 4", being the last four digits. Your social is used to file taxes, to work, to identify "you" as well as tracking your credit score and credit history. The Social Security Administration (SSA) issues SSN’s depending on your legal status in the United States, so not everyone has one (students for example who have no need to be working or anything like that).

When I first arrived in the US I arrived on a K1 fiancee visa. People on K1 visas are eligible to get SSN's, but only if you get it within the first 76 days of being in the U.S. I'm wasn't allowed to work so when I got my SSN it said "valid only with DHS authorization" (which means a work permit or greencard) on it. Only when I got my greencard was that wording removed.

The SSN is linked to credit history and credit score, and companies report to the credit bureaus (four major ones) that you have applied for a loan or card (approved or not), that you’ve defaulted (or not), how many credit cards and accounts you have and many other things. If you have a low credit score it can really start to negatively affect your life here in the US.

The credit score ranges from 300 – 850

• Between 300 and 499 – Bad credit score.
• Between 500 and 579 – Poor credit score.
• Between 580 and 619 – Low credit score.
• Between 620 and 679 – Average or OK score.
• Between 680 and 699 – Good credit score.
• Between 700 and 850 – Very good or excellent credit score.

As a new immigrant to the US, when I first arrived I had no credit score and no credit history, and there was no way to bring my history from Australia. It was important to start building my credit score and credit history as soon as possible and the most popular ways to do that are:

• Have an American spouse or parent put you on their credit card (referred to as “piggy-backing”) bearing in mind you get their good AND their bad;
• Get a secured credit card (Capital One has a good one); and
• Get a store card (some stores are really strict so this may take some time)

Credit score determines things like getting a car or home loan with a lower interest rate, being eligible for store cards and credit cards, whether you need to pay a larger security deposit (bond) for an apartment, how much your car insurance premium will be, even as far as whether the electricity company will let you get connected without a deposit first. It has been reported that some employers will even checking your credit history to see what sort of person you are and determine whether they want to hire you.

There are companies out there who claim they can monitor your credit score however many often erroneously report to the credit bureaus that you are a victim of identity theft and put a “fraud alert” on your account which in itself can damage your history. In fact, being a victim of identity theft, even after you clean all the stuff up to show that it wasn't you, you will still have a lower score because of your failure to properly protect your number.

Links:
Checking your score: www.creditkarma.com (free)
Checking history: https://www.annualcreditreport.com (free once a year)

So getting a SSN was actually a pretty big event for me. Suddenly I was "on the map", and now, over the years, I've started building my score to get into the excellent range :) The only bad thing about this is the junk mail asking you to get this or that credit card starts pouring in... but I admit I was pleased the first time I got some... but only the first time :P