Immigrants could be required to show credit scores if they want to stay in the U.S.

Immigrants will be required to show their credit scores.
Immigrants will be required to show their credit scores.

Under a U.S. Department of Homeland Security proposal, intended to determine who is considered “admissible” to the country, immigrants would have to provide evidence of their financial status. This includes applications for public benefits in the U.S., proof of private health insurance to cover certain medical conditions, and their credit histories and credit scores.

The purpose of the proposed rule, which the DHS secretary Kirstjen Nielsen signed on Friday, is to stop immigrants becoming legal residents who may become a “public charge,” meaning someone who is primarily dependent on government assistance. The proposal, which now faces public commentary, would also apply to immigrants seeking an extension of stay or change of status.

Credit reports and scores can reveal information about a person’s bill payment history, current debt, work and residence history, lawsuits or arrests and bankruptcies in the U.S., as well as whether or not that person is “self-sufficient,” according to the proposal.

The U.S. Citizenship and Immigration Services would consider a “good” credit score 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.”

The proposed rule defines a “good” credit report as “generally near or slightly above the average of U.S. consumers.” (FICO scores range between 300 and 850, and lenders generally consider one between 670 and 739 to be “good.”)

Some worry the rule would discourage immigrants from seeking public aid. “Allowing an immigration officer to pull your FICO FICO, +0.77%  before a final decision will take us bad places. Quickly,” said Matt Cameron, an immigration law attorney at Cameron Law Offices in Boston. He said many low-income families, especially first-generation immigrants, do need help with food.

Immigrants may decide against receiving “women, infants and children” or WIC benefits to avoid trouble with immigration agents, he said. “I grew up on WIC and public housing, I don’t know what my parents would have done without it,” he said. “To make immigrants choose a green card in the future or take care of their kids right now is really cruel.”

Others say the proposal is long overdue. “We have had too lenient a definition of public charge since the 1990s,” said Jessica Vaughan, director of policy studies at the Center for Immigration Studies, a Washington, D.C.-based non-profit organization that favors lower immigration numbers. “They needed to update the rules.” Credit histories and scores won’t be the only factor in an immigration agent’s judgment of immigrants’ applications, and would be an objective way to demonstrate good financial standing, she said. “There’s nothing political about it,” Vaughan added.

Immigration law never required such substantial proof of financial status before, said Doug Rand, co-founder and president of Boundless, an immigration assistance firm. Immigrants have a financial sponsor who vouches for them that they will be self-sufficient. They must also show that they’re earning enough money to be above 125% of the poverty line (for a family of three, that would be $25,975, according to the Department of Health and Human Services).

Rand, who also worked for the Obama administration, said focusing on credit-card debt wouldn’t properly depict an individual’s entire financial situation. The best case scenario is a complex system of paperwork and case rulings for agents, employers and employees, he said. “The worst case is rejecting people for seemingly innocent things, like having a high credit-card balance,” he added.

Many immigrants have no credit scores, and must build their credit history from scratch, which takes 3 to 6 months, according to credit company ExperianEXPGY, +0.82% To get started, people need to have at least one credit account in their name, which may only be possible through a lender offering a secured account or a family or friend co-signing a loan. Alternatively, they could use a prepaid debit card that reports activity to the credit agencies.

The lack of a credit report or score “would not necessarily be a negative factor” in deciding whether an immigrant could become reliant on public benefits, the proposal states. If no report or score is available, the U.S. Citizenship and Immigration Services may consider immigrants in good standing if they can show little to no debt or a history of paying bills on time.

The proposal also suggests DHS agents review whether immigrants were certified to receive public benefits, such as food stamps, and whether they’ve been using those benefits for longer than allowed.

Only immigrants with “lawful permanent resident status” who have lived in the U.S. as a legal resident for five years can participate in certain programs, according to the National Immigration Forum.

The Department of Homeland Security would make exceptions in certain situations that would warrant extended time on public assistance when, for example, someone is unemployed and finishing a college education.

See the proposal by the DHS here