Thousands of noncitizens each year get a mortgage using an individual taxpayer identification number (ITIN). Regular citizens might think that they can "erase" their negative profile by building a new history with an ITIN, but this is illegal and probably won't even work. If you truly cannot get a Social Security number, it might be possible to build credit with an ITIN.
Identification
The Internal Revenue Service does not promote the use of the ITIN for anything other filing taxes when you cannot obtain a SSN, according to the agency's website. Since the credit bureaus track credit histories based on SSNs and mailing addresses, using an ITIN does not guarantee you can build credit. The credit bureaus report information from lenders, so you would have to persuade a creditor to report your ITIN as an SSN.
Alternative Credit
People who have only an ITIN often use alternative credit agencies to build credit. Alternative credit agencies report bills, such as rent and utility payments, in return for a monthly subscription. Some ITIN borrowers use the age-old tactic of saving canceled checks or receipts from creditable accounts to prove their creditworthiness to lenders.
Warning
If you have an SSN and current credit profile, you cannot escape it by substituting an ITIN for your SSN on loan applications. This is an illegal tactic called "file segregation," according to the BCS Alliance. Lenders that find out that you used an ITIN to hide your other credit profile could notify the attorney general of your state, who will charge with felony credit fraud; also this may result in fines, jail and the cancellation of your loan.
Tip
Undocumented workers should ask their consulate for a identification card. Workers coming to the U.S. through Mexico often sign up for a "matricula consular" to prove their identity, according to BusinessWeek. Using supporting identification, along with an ITIN so you can pay taxes and verify income, is probably enough to acquire the same loan as someone using an SSN, such as a mortgage and car loan.
References
- Internal Revenue Service: Individual Taxpayer Identification Number (ITIN)
- BCS Alliance: Can I Create a New Credit File or Credit Identity?
- "Wall Street Journal" newspaper; Mortgage Prospects Dim for Illegal Immigrants; Miriam Jordan; 2008
- Social Security Administration. "Social Security Numbers for U.S. Permanent Residents." Accessed June 19, 2020.
- Social Security Administration. "Social Security Numbers for Noncitizens," Pages 1-2. Accessed June 19, 2020.
- WalletHub. "Best Credit Cards Without SSN Requirements." Accessed June 19, 2020.
- American Express. "American Express and Nova Credit Launch Industry-First Integration to Help Extend Credit to More Newcomers to the U.S." Accessed June 19, 2020.
- Internal Revenue Service. "Taxpayer Identification Numbers (TIN)." Accessed June 19, 2020.
- Internal Revenue Service. "Instructions for Form W-7," Accessed June 19, 2020.
- Internal Revenue Service. "Instructions for Form W-7," Accessed June 19, 2020.
- Internal Revenue Service. "Instructions for Form W-7," Accessed June 19, 2020.
- Capital One. "Platinum Credit Card from Capital One." Accessed June 19, 2020.
- Capital One. "General credit card questions." Accessed June 19, 2020.
- Experian. "Being a Cosigner Can Help Build Your Credit." Accessed June 19, 2020.
- Experian. "Cosigners are Responsible for Debt Repayment." Accessed June 19, 2020.
- Experian. "Understanding Secured Credit Cards." Accessed June 19, 2020.
- Experian. "Will Being an Authorized User Help My Credit?" Accessed June 19, 2020.
- Experian. "Authorized User vs. Cosigner." Accessed June 19, 2020.
- Federal Deposit Insurance Corporation. "Prepaid Cards and Deposit Insurance Coverage." Accessed June 19, 2020.
- Consumer Financial Protection Bureau. "Know your rights." Accessed June 19, 2020.
Writer Bio
Russell Huebsch has written freelance articles covering a range of topics from basketball to politics in print and online publications. He graduated from Baylor University in 2009 with a Bachelor of Arts degree in political science.