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YOUR CREDIT SCORE COULD SOON AFFECT YOUR ABILITY TO OBTAIN US CITIZENSHIP

On September 21, 2018, the U.S. Department of Homeland Security (DHS) proposed changing how it determines whether an alien is inadmissible to the United States under section 212(a)(4) of the Immigration and Nationality Act (INA) based on whether he or she is likely to become a public charge at any time, in the opinion of the consular officer at the time of application for a visa, or in the opinion of the Attorney General at the time of application for admission or adjustment of status. Aliens who seek adjustment of status or a visa, extension of stay, or who are applicants for admission, must establish that they are not likely at any time to become a public charge, requiring them to demonstrate that they have not received, are not currently receiving, nor are likely to receive, public benefits. The consular officer or the Attorney General at a minimum considers the alien’s age, health, family status, assets, resources, and financial status; and education and skills.

Under current regulations, the burden of demonstrating that the alien is not likely to become a public charge typically falls to the sponsoring United States relative, who must complete and file an Affidavit of Support.

The INA does not define the term “public charge.” DHS is proposing to define a public charge as an alien who receives one or more public benefits, as defined in 8 CFR 212.21(b). DHS is proposing to consider whether the alien has received since obtaining the nonimmigrant status he or she seeks to extend or to which he or she seeks to change, is currently receiving, or is likely to receive public benefits as defined in the proposed rule, when adjudicating an application to extend a nonimmigrant stay or change a nonimmigrant status.

As noted, one of the elements in analyzing whether an alien is likely to become a “public charge” is the alien’s “financial status.” When reviewing whether the alien has any financial liabilities or past reliance on public benefits that make the alien more or less likely to become a public charge, DHS is proposing to review an alien’s credit histories and credit scores, among other things. Part of this proposal would add the burden of completing and filing a new form, the proposed Form I944, and would require applicants to bear the cost of obtaining a credit report and credit score from any one of the three major credit bureaus in the United States and submit it with the application.

As also noted, DHS also proposes that the United States Citizenship and Immigration Service (USCIS) would consider an alien’s liabilities and information of such liabilities in a U.S. credit report and score as part of the financial status factor. Not everyone has a credit history in the United States. Nevertheless, a good credit score in the United States is a positive factor that indicates a person is likely to be self-sufficient. Conversely, a lower credit score or negative credit history in the United States may indicate that a person’s financial status is weak and that he or she may not be self-sufficient.

Credit reports contain information about a person’s bill payment history, loans, current debt, and other financial information.Credit reports may also provide information about work and residences, law suits, and bankruptcies in the United States. A U.S. credit score is a number that rates a person’s credit risk at a point in time. It can help creditors determine whether to give the person credit, affect the terms of credit the person is offered, or impact the rate the person will pay for a loan in the United States.

U.S. banks and other entities use credit scoring to determine whether a person is likely to repay any loan or debt. A credit report takes into account a person’s bill-paying history, the number and type of accounts with overdue payments, collection actions, outstanding debt, and the age of the accounts in the United States. USCIS would generally consider a credit score characterized as “good” or better to be a positive factor as it demonstrates an applicant may be able to support him or herself and any dependents assuming all other financial records are sufficient.

A “good” credit report is generally near or slightly above the average of U.S. consumers, and therefore the person may be self-sufficient and less likely to become a public charge. A poorcredit report is well below the average of U.S. consumers.

The absence of an established U.S. credit history would not necessarily be a negative factor when evaluating public charge in the totality of the circumstances. Absent a U.S. credit report or score, USCIS may give positive weight to an alien who can show little to no debt and a history of paying bills timely. An alien may provide evidence of regular and timely payment of bills, and limited balances on credit cards and loans. In addition, USCIS would not consider any error on a credit score that has been verified by the credit agency in determining whether an alien is likely to become a public charge in the future.

In any event, and in anticipation of the entry into force of these proposed regulations, any alien who is intending to apply for a visa or to adjust status should consider his or her credit score and how it can have an effect on the adjudication of the immigration application, and should try to take those steps necessary to improve his or her credit history and score, to the extent possible.

In light of these proposed changes, what steps can an applicant take to improve his or her credit history or score? The first stepis to obtain a current and complete copy of your credit report. There are many sources available to obtain this information. By law, you are entitled to obtain a free copy of your credit report every 12 months. The site to obtain this information is: https://www.annualcreditreport.com/index.action, which will provide you with current copies of your credit histories, as maintained by the three national credit bureaus, Experian, Equifax and Transunion. The site will not provide you with your credit scores. If you want to obtain your scores here, the credit bureaus will charge to provide them to you. They are not inexpensive.

It may be a better option to obtain your credit scores from a consumer credit monitoring site. For example, you can obtain your credit score from Experian at a site calledwww.freecreditscore.com. Be aware that these sites sometimes utilize different scoring models to calculate your credit score. The two most commonly used scoring models are called FICO and Vanguard. If you are looking at your score to monitor whether it is going up or down, it doesn’t really matter which of these scores you look at, just be certain that you are comparing your scores from the same scoring model. (In other words, compare your FICO score only to another FICO score and your Vanguard score to another Vanguard score)

Vanguard scores are utilized on one of the most popular sites for free credit monitoring, credit karma. You should be advised that Vanguard scores are oftentimes as many as sixty points different than an individual’s FICO score. This is important because FICO scores are the scoring model most frequently used by lenders and accordingly, are the scores likely to be utilized by the USCIS.

Once you have obtained a copy of your credit report, the second step is to review it closely. Oftentimes, items appear on individual’s credit reports that do not properly belong to them. If this happens to you, you have a right to dispute such improper items with the credit bureaus. Be cautious about how you dispute these items, the credit bureaus will offer you the opportunity to dispute these items online but doing so may result in your waiver of important legal rights.

Reviewing your credit report may reveal accounts that you owe. Be careful when addressing these accounts, paying them off does not necessarily boost your credit scores like you may expect them to. Entering a payment plan on older accounts could also potentially retrigger the statute of limitations on the account, allowing you to be sued when such suit had previously been time barred.

If you don’t have and use a credit card, the American credit scoring models make it difficult for you to have a high score. What if your credit score isn’t high enough to qualify for a credit card? You may want to investigate a “secured credit card.” These cards allow you to make a deposit into an account, which “secures” any charges you make on the card. These cards typically do not require a good credit score, and in fact the card issuer ordinarily doesn’t even look at your credit.

The third step, and perhaps most important, one of the keys to a healthy credit score is paying your bills on time. Late payments on mortgages, auto loans and credit card bills will seriously damage your credit score. If you find yourself in a “cash crunch” prioritize these bills. Other bills, like utility bills, cell phone bills and rent typically do not report to the credit bureaus, unless and until they are sent to collection. If you need financial breathing room, you may be able to delay payment of these types of bills for a short period of time. (Just be sure that you don’t let them go into default status where they will be sent to collection.)

Credit scoring is “forward looking.” You may have to clean up some older derogatory items on your report, but if you start today with timely payments and proper card utilization, you can begin to grow your scores in a positive direction.

There are companies that can assist you with growing your scores and understanding the credit scoring process. They can help you to avoid some of the potential pitfalls discussed above.Make certain that you are diligent in researching these companies before choosing one to work with. Look for a company that has been in business for five years or more and has well credentialed employees. Be cautious with big “internet” credit repair companies. Often all that they do for you is repeatedly send letters to the credit bureaus, they don’t provide you with education about the credit scoring models or give your credit issues proper individual attention.

Richard Hein (@STLLawyer) is a bilingual (Spanish/English) immigration lawyer in Saint Louis, Missouri, and Board Member of International Law Firms, an international association of highly regarded law firms with member firms in more than 70 cities and 50 countries worldwide. Rick regularly provides legal analysis on domestic issues of international interest, and has appeared on CNN enEspañol, Voice of America, Radio France International, Deutsche Welle, Univisión, NTN24, El Clarín (Argentina), and TeLoCuento News (Caracas).

 

Charlie Scanlon (@123pccStL) is a lawyer, public speaker, consumer credit expert, and President of Phoenix Credit Consultants, a nationally recognized credit repair and restoration company in Saint Louis, Missouri, and General Counsel for Commencement, LLC, a student loan debt counselling company. Charlie frequently writes on the subject of credit and the laws that govern it; he is well versed in the Fair Credit Reporting Act, The Fair Debt Collection Practices Act and other legislation that impacts the proper reporting of consumer credit.