New to the U.S. With No Credit History? Debit Card Spending Won't Build It. Here's What to Know First

1In a hurry? Start here

1. No matter how much you use a debit card, it won't help you build credit. For most credit scores, a record of paying on time is the most important factor.

2. You can check your credit reports free once a week. The only officially authorized website is AnnualCreditReport.com.

3. If someone says they can erase accurate negative information for a fee, don't take their word for it, and don't pay upfront.

Let's say Ajie has been in New York for three months.

(Ajie is fictional, and the situations below are hypothetical.)

The card linked to his payroll account is a debit card. He uses it for groceries, the subway, coffee—hundreds of transactions in a month. Surely all that card spending must be building his credit, he thinks.

Then he applies for an apartment. After checking, the other person tells him, “We couldn't find any credit history for you.”

Ajie is stunned. But I use my card every single day.

2What people are asking in the comments

Over the past six months, Xiaohongshu posts asking “Which credit card should I get first?” have drawn comment after comment, mostly naming cards and cashback rates. “Building credit from 0 to 1” is another big category. Some people make a point of warning that “an ITIN isn't a free pass to a credit card.” Plenty of others share sign-up bonuses and discuss how to make the most of the rewards.

This article doesn't recommend any particular card. Card terms change often, and whether a card suits you depends on your situation. What follows is useful whichever card you eventually apply for.

3Your credit report is your transcript; your credit score is your GPA

A comparison with school makes this easier to understand.

A credit report is like a transcript. According to the Consumer Financial Protection Bureau (CFPB), it records your borrowing history: which accounts you've opened, whether you've paid on time, whether debts have gone to collections, and who has recently checked your credit. Lenders look at it, and landlords, insurers, utility companies and phone companies may look at it too. The U.S. has three nationwide credit reporting companies: Equifax, Experian and TransUnion.

A credit score is like a GPA: a number calculated from that transcript. The CFPB says you don't have just one credit score. Different companies and different formulas produce different scores, much as schools calculate GPAs differently. The Federal Trade Commission (FTC) adds that credit scores usually range from 300 to 850, and most lenders use FICO scores.

This is where Ajie's problem comes in. A debit card spends money already in your own account. It isn't borrowing, so there's nothing to put on that transcript. The FTC's comparison page is straightforward: debit cards don't help you build a credit history, and most prepaid cards aren't reported to credit reporting companies either.

When people first arrive, it's easy to assume that using a card more means building more credit. But credit in the U.S. isn't a record of how much you've spent. It's a record of whether you've paid back borrowed money on time.

4Debit and credit cards differ even more when you lose them

Many people don't know this: if someone uses your card without permission, federal law sets very different limits on what you may have to pay, depending on the type of card. Here's how the FTC explains it.

• Credit cards: if you report the card lost before anyone uses it, you aren't responsible for unauthorized charges. If it has already been used, your maximum liability is $50.

• Debit and ATM cards: if you report the loss before unauthorized use, you aren't responsible. If you report it within two business days after discovering the loss, your maximum liability is $50. After two business days, but within 60 days after the statement is sent, the maximum is $500. After 60 days, you may lose all the money taken, potentially including money in linked accounts.

So if you lose a debit card or see a charge you don't recognize, the first thing to do is call and report it immediately. Don't put it off even for a day.

5Common ways to start from zero

The CFPB and FTC describe the following approaches. Which one fits depends on your own circumstances.

• A secured credit card. You put down a deposit first—$500, for example—and the credit limit is based on that deposit (CFPB). The FTC notes that many secured cards report how you use them to credit reporting companies, but their interest rates and fees are often higher.

• A credit builder loan. A bank or credit union lends you money but holds it for you initially. You usually repay it over 6 to 24 months and receive the money after you've finished repaying it. The payment record is reported to the three credit reporting companies.

• Becoming an authorized user. A family member or partner adds you to their credit card. A CFPB booklet says the card's payment history will usually appear on the authorized user's report. That means the primary cardholder's payment habits follow you too.

• Rent. The CFPB says the three credit reporting companies use rental payment data, but each handles it differently. You can ask whether your landlord participates in a rent reporting program, and check whether there's a fee.

• Utilities. The CFPB says most utility companies don't report your payment history to the three credit reporting companies. Unpaid bills sent to collections, on the other hand, are likely to show up on your report.

Whichever route you're considering, you can ask this before applying.

Does this account report to all three credit bureaus?

In other words, will this account be reported to all three credit reporting companies?

6No SSN? Ask these questions first

First, the ITIN. The Internal Revenue Service (IRS) is clear on its website: an ITIN is for federal tax purposes only. It doesn't authorize you to work, and it can't serve as identification outside the tax system. The page doesn't mention credit cards.

The CFPB says a card issuer may ask for your SSN to obtain your credit report. Whether someone without an SSN can apply using an ITIN varies by issuer; this review did not find a single official rule that applies across the board. That's roughly what people mean in the comments when they say “an ITIN isn't a free pass to a credit card.”

There's also a development from this year. On January 12, 2026, the CFPB and the Department of Justice withdrew a joint statement issued in 2023 about lending to noncitizens. The new press release says the relevant regulations allow lenders to consider a borrower's immigration or citizenship status. So being asked about your status when applying isn't unusual.

Rather than guessing from posts, ask directly.

I don't have an SSN yet. Can I apply with an ITIN, and what documents would you need?

In other words, can I apply with an ITIN before I have an SSN, and which documents are required?

7Paying on time matters more than anything else

This is the first point in the CFPB's guidance: most credit scores treat payment history as the most important factor. The same page makes a few other points. Experts recommend using no more than 30% of your total credit limit; a longer credit history helps; and applying for a lot of credit in a short time may make lenders think you're having financial trouble.

What exactly does “on time” mean? The CFPB says it means paying at least the minimum amount by the due date. But if you pay only the minimum, the remaining balance accrues interest. Another CFPB page says that to keep your grace period, you need to pay the full statement balance on time every month. Card issuers must also tell you how long it would take to pay off the balance if you made only minimum payments. There's a box on the statement with that information. Look for it next time your statement arrives.

What if you're late? A CFPB handout from 2020 says that if you pay within 30 days after the due date, the account is typically still reported as current; the report records the number of times payments were 30, 60 or 90 days late. Notice the word “typically.” And this is only about credit reporting. How interest and other fees are calculated depends on your card agreement.

If something does get recorded, how long does it stay? The CFPB says most negative information can generally remain for seven years, and bankruptcy for up to ten years. If the information is accurate, no one has the right to remove it.

When money is really tight, the CFPB booklet has some practical advice too: even if you can only make the minimum payment, make it on time.

8Check your reports free every week, and dispute errors

The FTC says the three credit reporting companies have permanently extended free weekly credit reports. The only officially authorized website is AnnualCreditReport.com. You can also call 1-877-322-8228. The FTC specifically warns that some websites deliberately misspell this address; AnnualCreditReport.com and the credit reporting companies also won't email you asking for your SSN.

If you see an account you don't recognize or information that's clearly wrong, you can dispute it. The FTC recommends writing to each credit reporting company whose report contains the error, attaching copies rather than original documents. Dispute it with the company that supplied the information as well. The CFPB says credit reporting companies generally have 30 days after receiving a dispute to investigate; if you dispute something after receiving your free annual report, the period is 45 days.

If you're worried about identity theft, you can also place a security freeze with all three companies for free. Federal law provides for this (New York State Department of State guidance from 2018).

9A few more local rules in New York

• Medical debt. New York State's Fair Medical Debt Reporting Act took effect on December 13, 2023. According to the state Attorney General's Office, medical providers such as hospitals and ambulance services can't report your medical debt to credit reporting companies, and those companies can't include medical debt in your report, including debt on medical credit cards. Medical expenses paid with a regular credit card may still appear, though. If you see something that shouldn't be there, dispute it with the credit reporting company. You can also call the state Attorney General's Office at 1-800-771-7755.

• Renting. The maximum a landlord can charge for a background and credit check when you apply is $20. The article about broker fees in this series explains this in more detail.

• Finding work. New York City's Stop Credit Discrimination in Employment Act took effect on September 3, 2015. According to the New York City Commission on Human Rights, most employers in the city can't request or use your credit history to make hiring decisions, with only a few exceptions.

10Two “but what if…” questions

“But those sign-up bonuses look so good. Wouldn't applying for more cards be a better deal?”

This article isn't judging rewards; every card has different terms. Just keep two CFPB points in mind. First, applying for a lot of credit in a short time may make lenders worry about your finances. Second, a longer credit history helps—and when you've just arrived, yours is short to begin with. However generous the rewards, the numbers may stop adding up once a balance starts accruing interest or you miss a payment.

“But someone says they can fix my credit if I pay them.”

The FTC's FAQs give a thorough picture of these scams. They insist on payment upfront, tell you not to contact the credit reporting companies, coach you to dispute accurate information or falsely report identity theft, or claim they can give you a “new credit identity” using an Employer Identification Number (EIN). The federal Credit Repair Organizations Act doesn't allow these companies to charge upfront. No one can erase accurate negative information; it goes away only with time. Disputing errors is something you can do yourself.

11One last thing

Credit takes time. It doesn't count how often you've used a card. It tracks whether, month after month, you repay what you've borrowed on time.

Ajie's hundreds of debit card transactions weren't wasted. At least he knows where his money went. Starting next month, though, he'll have to build his record in a different way.

How long did it take you to get your first card after arriving in the U.S.? What pitfalls did you run into? Share in the comments if you'd like—no need to name the card.