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June 13th 2023

Why a Social Security Number (SSN) is so important

This guide will provide a brief overview of what a Social Security Number is, how to get one, and why it is important in the United States—from employment and taxes to applications for bank accounts, drivers licenses, and more.

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What is a Social Security number?

Social Security is a government insurance program in the United States used to provide financial assistance for those who are retired, unemployed, or disabled. The working population pays a portion of their earnings in tax into the program each year, which are distributed as income to people when they retire or fulfill other eligibility requirements.

As part of the program, the Social Security Administration (SSA) issues every citizen and qualifying resident a unique nine-digit Social Security Number (SSN). The SSN was originally created to track employee’s earnings and benefits under the program, but has now evolved to also be a critical piece of identification for a variety of purposes beyond Social Security.

Today, a Social Security Number (SSN) is an essential element of establishing your life in the United States. It serves as the unique identifier for citizens, permanent residents, and foreign nationals who meet certain eligibility requirements, and has become a requirement for various financial, social, and administrative processes.

Who can apply for an SSN

All U.S. citizens, permanent residents, and some temporary residents are eligible to obtain an SSN. It is crucial for anyone who works, pays taxes, or receives government benefits in the United States. 

In some cases, foreign nationals who do not have the right to work in the U.S. may still be eligible for an SSN if they require one for federal tax purposes or to receive government benefits. 

Several other foreign nationals, such as spouses and children of eligible non-citizens, may be not eligible for an SSN. These individuals may still apply for an Individual Taxpayer Identification Number (ITIN), which can help serve as an identifier for some use cases listed below.

How to apply for an SSN

Applying for an SSN is a straightforward process. For U.S. citizens, it is typically done at birth, when parents complete the appropriate paperwork at the hospital. 

For others, the process involves visiting a local Social Security office and providing the necessary documents, such as proof of identity, work eligibility, and immigration status. You will need to wait 10 days after arriving in the United States to apply for a SSN.

Why an SSN is so important

There are a variety of reasons why a Social Security number is important to your life in the United States. We’ll run through the major use cases here, so you can understand how to take advantage of its benefits as soon as you arrive:

Employment and taxes

The primary reason why a SSN is important is its role in employment and taxation. Employers in the United States are required to verify the identity and work eligibility of their employees, which they do using the SSN. Employers also use an individual's SSN to report wages to the SSA and the International Revenue Service (IRS), which is critical to track how much an individual has paid into the program over the years. 

The SSN is also required as the main identification number when filing federal and state tax returns, used to ensure an individual is correctly paying taxes according to their reported wages.

Accessing financial products

An SSN is crucial for various financial transactions, such as applying for a loan or credit card, and investing in securities. Financial institutions generally require an applicant’s SSN to verify their identity and comply with anti-fraud and anti-money laundering regulations as part of credit application.

This is mandatory for most federal and private loan applications, especially those with large loan amounts. While it is possible to get a credit card without an SSN, several major credit card companies require an SSN, so having one will give you more options to choose from.

While some banks allow you to open up a checking and savings account without an SSN, you will generally need to apply for it in person and provide another identification number, like an Individual Taxpayer Identification (ITIN) number, instead.


Beyond these use cases, your SSN is important because it serves as a unique identifier in various other contexts across education, healthcare, and government applications. For instance, most states require an SSN as part of driver's license applications, as do most health insurance companies and healthcare providers. 

In some cases, the SSN is used to verify an individual's identity when conducting background checks, credit checks, or criminal history inquiries. While you do not need an SSN to establish a credit score in the U.S., it does improve the accuracy of matching a credit history with a consumer.

Government benefits and services

An SSN is also important to access several government benefits and services. In addition to accessing Social Security benefits, which lawful immigrants can do with an SSN, individuals need an SSN to apply for Medicare and receive disability or unemployment benefits. The SSN is also used in the administration of many other federal and state programs, such as public assistance and educational grants.

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The key takeaway

When living in the United States, having a Social Security number is important for a variety of reasons. Not only will you need it for wage tracking and tax purposes for any job that you work, but you may also need it to access financial products, government services, and other essentials in your day-to-day life.

Fortunately, it is free and straightforward to apply for a Social Security card and get an SSN shortly after you have arrived in the United States.

Accessing many of these essential services in the U.S. also requires that you have a good U.S. credit score. Fortunately, you can use Nova Credit to use your foreign credit history from certain countries to apply for a variety of products and services from our partners. This means that you can apply for great credit cards, phone plans, and more from using your hard-earned credit history from back home—rather than needing to start from scratch. Sometimes you can apply even before you have an SSN.

Currently, Nova Credit serves individuals coming from Australia, Brazil, Canada, Dominican Republic, India, Kenya, Mexico, Nigeria, Philippines, South Korea, Spain, Switzerland, and the U.K.

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