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Credit lessons we can learn from immigrants

Although many newcomers to the US initially struggle to build credit, experts say immigrants often display behaviors we could all do well to emulate.

Although many newcomers to the US initially struggle to build credit, experts say immigrants often display behaviors we could all do well to emulate.
"They are great loan risks, and in fact, bankers who work with immigrants say that their repayment rate is superb, and they care about their reputations," says Claudia Kolker, author of "The Immigrant Advantage."
"There's not a sense of entitlement about 'gimme, gimme, it's all mine anyway," continues Kolker. "This sense of playing by the rules, wanting to fulfill their obligations here, makes them really good models."
Sajib Chowdhery, now owner of two restaurants in Houston, began his business in 1998 . He started small and failed many times but he knew he had to build his credit to succeed -- which he did, eventually.
"After three or four years I built my credit," explains Chowdhery. "I started to buy some land, I started to buy a car, I started to lend some money from banks and I paid it off, and after that I had good credit, very good credit."
A study by the Fiscal Policy Institute's Immigration Research Initiative demonstrates that while foreign-born people are 12 percent of the U.S. population, they are 18 percent of the business owners.
Ken Jones, the director of the entrepreneurship program at the University of Houston, teaches undergraduates, many of whom are children of immigrants.
"Immigrants in large part are hamstrung without a lot of resources and so they become so creative to be able to figure out ways to take one dollar and turn it into many dollars out of sheer necessity," says Jones. "Their access to borrowed capital is going to be much more limited."
That's why a local nonprofit called Neighborhood Centers created a special credit union for newly arrived immigrants. The new credit union is the first to be chartered by the state of Texas since 2004 and it's designed to help families who do not have a relationship with traditional financial institutions.
"They're very hard-working, very reliable," says Randy Martinez, CEO of Promise Credit Union. "They want to do what's right and pay back whatever it is that they've borrowed from, not just our credit union but anybody else that they've borrowed from. I think that's been proven over that they really are very trustworthy."
As a nation of immigrants, we have all had to learn the American way. And today more than ever, the American way involves building credit.

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