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A new rule may allow the government to review the credit histories and credit scores of immigrants seeking visas or citizenship.
The rule, titled Inadmissibility on Public Charge Grounds, was planned to go into effect on October 15, 2019, but due to some legal challenges, it was kept from going forward. However, on January 27, 2020, the government received approval to move forward with the public charge rule.
Announced by the Department of Homeland Security (DHS), the rule included guidelines that would help determine whether an immigrant would be likely to become a public charge. A "public charge" means someone who is primarily dependent on government assistance. The government would look at credit histories and credit scores, and whether an immigrant has used public benefits in the past and whether they have money to pay for private health insurance. The rules would apply to immigrants seeking a visa or a change in their immigration status.
According to the rule, there are some good reasons to look at an immigrant's credit. Credit reports and scores can show information about a person's bill payment history, outstanding debt, work and residence history, lawsuits, arrests, collections, actions, and bankruptcies in the U.S., as well as whether or not that person is "self-sufficient".
Under the rule, a "good" credit report would be the one that is "generally near or slightly above the average of U.S. consumers." While there is no specific formula that would measure a good credit score, the average U.S. FICO score was 706 in September, according to a FICO blog post.
If an immigrant does not have good credit or has had some form of public assistance in three years before they apply for permanent residency under this new rule, they could be denied.
Since credit history isn't transferable from country to country, it may not be easy to achieve a 706 credit score. Newcomers to the U.S. have to start building credit from scratch, which is in many cases possible with secured credit cards.
If an immigrant does not have a credit report or credit score, no penalty will be imposed. For such immigrants, other evidence may be considered such as on-time bill payments or bank and bill statements. Also, immigrants who come to the U.S. for humanitarian purposes (such as refugees and asylum-seekers) would not be subject to the public charge rule.
The new rule could help shorten the long line of green card applicants, favoring many immigrants on the waitlist who can clear the tighter standards.