Borrowing With an ITIN Instead of a Social Security Number

What an ITIN is, and what it is not

The Individual Taxpayer Identification Number is a nine-digit number the Internal Revenue Service issues for federal tax purposes only. It goes to people who need a U.S. taxpayer number, for example to file a return or be claimed as a spouse or dependent, but who are not eligible for a Social Security number. You apply with Form W-7, usually attached to your tax return.

The IRS notes that an ITIN can expire and that an expired one must be renewed before you file. Make sure yours is current before you apply for credit, since the tax returns a lender asks to see depend on it.

How a lender verifies you without an SSN

Banks follow a federal customer identification rule, 31 CFR 1020.220. For a person who is not a U.S. person, it allows a lender to take a taxpayer number such as an ITIN, a passport number with its country of issue, an alien identification card number, or the number of another government photo ID showing nationality or residence. Whether a given lender takes those for a loan is its own policy.

• Identity: an unexpired government photo ID, such as a passport or a driver's license, plus your ITIN.
• Income: one or two years of federal tax returns filed with your ITIN, recent pay stubs or 1099 forms, and bank statements that show the deposits.
• Address and stability: a lease or utility bills in your name, and how long you have lived and worked where you are.
• Credit history: a credit report if one exists under your ITIN; if not, records of rent and utility payments some lenders will review.

The general list is on documents you need. Ask before you apply whether the lender reports to the credit bureaus under an ITIN, because a loan that is never reported does not build your history.

What federal law lets a lender consider

The Equal Credit Opportunity Act and its rule, Regulation B, list prohibited bases for a credit decision: national origin, race, color, religion, sex, marital status, age, receiving public assistance, and exercising your consumer credit rights in good faith. A lender may not deny you, or price your loan higher, because of the country you or your family come from.

Regulation B also says, at 12 CFR 1002.6(b)(7), that a creditor may consider an applicant's immigration status or status as a permanent resident, and may ask for what it needs to know about its rights if the loan goes unpaid. The CFPB's official commentary explains that a lender may treat a long-term permanent resident differently from someone in the country briefly on a student visa, and that denying credit only because someone is not a citizen is not, by itself, national-origin discrimination.

Where ITIN borrowers tend to find loans

Acceptance varies by lender and changes over time, so we name no one. These are the kinds of places to ask first, in roughly this order:

1. 1 A credit union you can join. Ask whether it opens accounts and makes loans with an ITIN. Federal credit unions can also offer small payday alternative loans of up to $2,000 with an application fee capped at $20.
2. 2 A Community Development Financial Institution (CDFI). The Treasury's CDFI Fund describes these as mission-driven financial institutions that serve economically disadvantaged communities. Its awards database lists CDFIs it has funded, by state.
3. 3 A licensed installment lender in your state that states in writing it accepts ITIN applications. Check its license first with how to verify a lender.

Be wary of anyone who asks for an upfront fee to arrange a loan "for ITIN holders" or who wants to use a Social Security number that is not yours. Treat both as warning signs, and walk away.

What a thin file costs, and how to build one

With little or no credit history, the offers you get tend to carry higher rates. A worked example shows what that gap means on a modest loan. The figures are illustrations, not offers.

The higher rate costs $431.28 more over two years. A few months of reported on-time payments can narrow that gap. Common first steps are a secured credit card, a small credit-builder loan from a credit union, and making sure any account you open reports under your ITIN. Funditia covers the mechanics in how to build credit. Once you have offers, line them up with the offer comparison calculator.

Questions people ask