Credit building question

[ryna 132]

My story is a dream come true for a person looking for credit. Here is a timeline:

Jan 2009 (entry)

March 2009 (been working steady since this date....she earned $17,500ish last year before taxes which is at her $10/hour job PART-TIME...she was raised to $10.40 last summer 2010)

March 2009 (added her to my Merrill Lynch visa card which had a $2500 limit....this account was in good standing...never really went over 35% of the limit....and was opened in 2007)

****BREAK FOR QUESTION****

When my wifes credit file is pulled; where do you think they show her at the 3 bureaus of having initially getting into the credit market? March 2009? NO! They show her as establishing credit since 2007 when I opened the account. So off the bat she has 2 years of established credit even though she has only been in the country for a couple months.

Summer 2009 (SECURED credit card: I pay bank $400....she has $400 credit limit....we kept the balance around $125 and kept paying the minimum each month....after 9 months we were told she could be upgraded to an unsecured card....Long story short after the 9 months we CLOSED this low-credit card because I figured they would MAYBE jump her to $1,000 on an unsecured....OF COURSE the bank (Bank of America) returned our $400 via a check in her name.....

Here is where my memory is a little fuzzy....I'll just call it:

April 2010 (CHASE SAPHIRE mails her a letter inviting her to apply: Chase is my personal favorite for credit cards. I say, #######, let's apply, this is rare....I apply and call the number: Congratulations! You have been approved for a $5,000 limit!)

October 2010 (using her 715 median credit score and $17,500 annual income she was pre-approved for an FHA home loan for up to $60,000....We got a nice 1200 square foot fixer upper for $20,000 and the monthly payment is $342 a month with taxes/insurance included...All in her name)

November 2010 (apply for a chase Freedom....Congratulations, you have been approved for a $5,000 limit)

December 2010 (closed on home)

February 15th (last night, applied for an American Express Blue....they must have sent her 3 or 4 applications over the last year so said screw it, we don't need to apply for a HELOC for at least another year so lets get the inquiries out of the way...I am pretty sure she was approved for $2500 when I called to find out the credit line...unless I heard it wrong...

March 2011 and moving forward-----We are close, maybe a few months down the road from asking for some credit line increases on her Chase cards. Well, at least the Chase Saphire. She owes about $1,000 on each card with a $5,000 limit....The Merrill Lynch card she is an authorized user on that kicked off all the fun has a $0 balance out of $2500 limit. Hopefully they will jump her to $7500 or so...Some time in 2012 we plan to refinance the house, pay off the mortgage, and use the extra cash to buy a second fixer upper.

On a side note I applied a few months after her approval to Chase Saphire and was denied....I think I applied a second time and was denied....Finally last month I applied and I was approved on the Chase Freedom for a $7500 limit...This is my highest limit to date.

If I could recommend any card it would be either the Chase Freedom or Saphire. They will even send you a $100 check in the mail if you spend a certain amount (around $500) within the first few months....The freedom gives 5% cash back up to $800 per year...

Interesting.... If that is normal (to report back to the original account opening date), I think I'll be adding her to the accounts that I opened in the late 80s and early 90s first. If I only add her to the accounts with $0 balances, she could ultimately end up with a history as old as mine and a better credit utilization ratio than I have to boot!

And, yes, I've found that there are two classes of credit card users:

Authorized user - gets a card in their name, but is not an account owner and is not reported to the credit bureaus under the auth. user's name

Joint account holder - gets a card in their name AND is an account owner and is reported under each name

I want to avoid secured cards because, as I said earlier, I don't like lending banks my money for free and on top of that paying them interest to use it when I really don't need to borrow it in the first place.

I don't anticipate a need for her to have credit in the traditional sense anytime soon but since too many things are tied to that score these days (insurance rates, even hiring decisions in some cases), I want her score to be in the same range as mine (800) within 6 months so it won't affect anything when we will go to purchase and insure her car later this year.

Maybe it's good that the SSA has taken 5 weeks (and counting) to issue her a SS#... I've now had time to learn a few things about how joint credit is reported and to rethink our strategy for building her credit...

[Hendea3 4]

THanks!!! I applied for the capital one new immigrant one online last week and it was approved!!! After my own bank HSBC (which Ive held the account jointly for almost 3 years) denied me about 6 months (prior to permanent move on K-1 and no ssn mind u) anywho Im excited that I will finally start being able to build credit and its all in my own name!!! not even a joint card The nice thing about the application as it asks your household income therefore even if you are unemployed like me you can put your spouses income, and it also takes into account the amount of $ in all of your bank accounts...minus rent or mortgage payments. Its a horrible rate 24.9% and a 500$ limit but thats fine !!!

Try Capital One - I just got approved for a Platinum card with them despite being unemployed and having only been in the country 4 months Limit is only $300 but it doesn't matter - it is credit and I can use it and pay it off to start building my rating. I had a pretty decent credit rating back home so I'm determined to build myself a good rating.

Capital One also do a card that is specifically designed for people who have recently moved to the US - unfortunately I only found out about it after I'd applied for the other one, applied for it and was refused, probably because I'd only just been approved for the other one - but it has no annual fee and reports monthly to the 3 major credit bureaus. Definitely worth a shot.

You also have the option to be a co-applicant if you want to do that.

Here's the link: http://www.capitalon..._05_T_CP67020AW

Edit to add this: You will of course have to wait for her to get her SSN, but I would definitely consider this option once you've got that. I already had an SSN from when I worked here previously, so fortunately I had already overcome that hurdle.

[Nica_In_Love 98]

Try Capital One - I just got approved for a Platinum card with them despite being unemployed and having only been in the country 4 months Limit is only $300 but it doesn't matter - it is credit and I can use it and pay it off to start building my rating. I had a pretty decent credit rating back home so I'm determined to build myself a good rating.

Capital One also do a card that is specifically designed for people who have recently moved to the US - unfortunately I only found out about it after I'd applied for the other one, applied for it and was refused, probably because I'd only just been approved for the other one - but it has no annual fee and reports monthly to the 3 major credit bureaus. Definitely worth a shot.

You also have the option to be a co-applicant if you want to do that.

Here's the link: http://www.capitalon..._05_T_CP67020AW

Edit to add this: You will of course have to wait for her to get her SSN, but I would definitely consider this option once you've got that. I already had an SSN from when I worked here previously, so fortunately I had already overcome that hurdle.

Hey, thanks for the tip on the Capital One credit card, I just applied and they approve you right away online, the limit is $500 but it's ok to start with! Thanks again!

[whaddy 0]

Hey, thanks for the tip on the Capital One credit card, I just applied and they approve you right away online, the limit is $500 but it's ok to start with! Thanks again!

Would like to agree and advise others to apply but they declined me... why??? Not enough Credit History!!! They sent me a letter to let me know that since i did not have credit history with the credit rating companies I did not qualify Upshot, and correct me if i am wrong, is that the act of checking my credit history is viewed in a negative light and that applying for this card has put my credit score (non-existant) in a worse place than it originally had been (non-existant). Will call tomorrow to see if I can get some clarification but not exactly happy with this

[Nica_In_Love 98]

Would like to agree and advise others to apply but they declined me... why??? Not enough Credit History!!! They sent me a letter to let me know that since i did not have credit history with the credit rating companies I did not qualify Upshot, and correct me if i am wrong, is that the act of checking my credit history is viewed in a negative light and that applying for this card has put my credit score (non-existant) in a worse place than it originally had been (non-existant). Will call tomorrow to see if I can get some clarification but not exactly happy with this

I find that odd because I obviously don't have any credit history either since I've been in the US for just 4 months. Did you apply for the exact card that is linked here? The one created for new immigrants?

I don't know much about US credit scores or history but perhaps the fact that my husband has excellent credit history helped. I'm sorry to hear they declined you, I hope they clarify things.

[웃 910]

Would like to agree and advise others to apply but they declined me... why??? Not enough Credit History!!! They sent me a letter to let me know that since i did not have credit history with the credit rating companies I did not qualify Upshot, and correct me if i am wrong, is that the act of checking my credit history is viewed in a negative light and that applying for this card has put my credit score (non-existant) in a worse place than it originally had been (non-existant). Will call tomorrow to see if I can get some clarification but not exactly happy with this

Have your husband add you as an authorized user to a credit card account of his that is at least 3 years old. By doing this and associating your name and social security number with that card, you will pick up his credit history for that card.

Even though you have no credit right now in 2011 when you check your free credit report at annualcreditreport.com in a few months you will be pleasantly surprised that they all report your credit history going back YEARS with on-time payments.

Within the next several months the credit card solicitations will pour in.

PS: Do not believe people that say it doesn't work. It does. Don't waste your time applying for a new card because you will be denied. Just get added as an authorized user and apply in 6 months on your own.

The only way you can get credit right now is by paying the bank for a secured credit card (you pay your credit limit in advance, say $400 as collateral, and they give you a credit card with a $400 limit....they return your money in 9 months to a year and at that time close your account)....

[Deputy Purple 1,294]

Even though you have no credit right now in 2011 when you check your free credit report at annualcreditreport.com in a few months you will be pleasantly surprised that they all report your credit history going back YEARS with on-time payments.

This statement is so inaccurate that it borders on criminal.

Your Credit Report will show Tradelines that have a history going back in time but those tradelines will also indicate that you are not an account holder as you are only an authorized user.

LI you contradict yourself, in some places you state that all you did was add your wife as an authorized user to some of your account an instantly she got a mortgage with minimum wage income and there in the thread you list several steps in between those two events!

Anything that give you a decision online (like the capitol one link) is going to have very broad criteria. If the Credit Report comes back as NO-HIT then in most cases you'll just be denied. Being an authorized user can prevent the No-Hit and thus allow an applicant to get approved for one of the beginner cards.

[ryna 132]

Have your husband add you as an authorized user to a credit card account of his that is at least 3 years old. By doing this and associating your name and social security number with that card, you will pick up his credit history for that card.

Even though you have no credit right now in 2011 when you check your free credit report at annualcreditreport.com in a few months you will be pleasantly surprised that they all report your credit history going back YEARS with on-time payments.

Within the next several months the credit card solicitations will pour in.

PS: Do not believe people that say it doesn't work. It does. Don't waste your time applying for a new card because you will be denied. Just get added as an authorized user and apply in 6 months on your own.

The only way you can get credit right now is by paying the bank for a secured credit card (you pay your credit limit in advance, say $400 as collateral, and they give you a credit card with a $400 limit....they return your money in 9 months to a year and at that time close your account)....

I hope this is correct. I heard they changed the FICO scoring model a year or so ago to cut down on the effectiveness of "piggybacking" on someone else's credit history.

Last week, I added my wife as an authorized user on two of my credit cards dating back to 1996 and 2001 so we'll see.

If not, I will co-sign an unsecured card for her (like my parents did for me years ago.) I just can't bring myself to give a bank our money (for a secured card) for the privilege of paying them interest (probably at >10%) just to, in effect, borrow from ourselves.

I won't even carry a balance. No way I'm paying them to use our own money!

Edited March 15, 2011 by ryna

[Deputy Purple 1,294]

If not, I will co-sign an unsecured card for her (like my parents did for me years ago.) I just can't bring myself to give a bank our money (for a secured card) for the privilege of paying them interest (probably at >10%) just to, in effect, borrow from ourselves.

I won't even carry a balance. No way I'm paying them to use our own money!

You actually want to carry a balance of 20 - 35% Some Scoring models actually ding you for not using the credit.

If you don't want to pay interest then simply pay of the balance each month. You can use the card for purchasing gas or groceries (regular expenses) then pay it within 25 day of the first charge. It should allow a balance to be shown on the monthly statements (and therefore the Credit report) but no interest will be charged as the payment was within the 25 day grace period.

[ryna 132]

You actually want to carry a balance of 20 - 35% Some Scoring models actually ding you for not using the credit.

If you don't want to pay interest then simply pay of the balance each month. You can use the card for purchasing gas or groceries (regular expenses) then pay it within 25 day of the first charge. It should allow a balance to be shown on the monthly statements (and therefore the Credit report) but no interest will be charged as the payment was within the 25 day grace period.

That's how I use my cards now - to cover monthly expenses and I pay it them in full with every statement. And, that would be fine for hers, too.

That said... credit cards aren't my main concern. I would like to refinance the house to take advantage of the lower interest rates. I can do it on my own without problem, based on my credit history and income, but I don't think it would look good to USCIS if I did it without adding her to the deed/mortgage. I know they look for both people being on the lease, mortgage, etc. I'm afraid that her lack of credit score would sink the re-fi (or, at least, cause the rate to be higher than it is now in which case there is no point in doing so.)

Either way, she doesn't get added like I would prefer but I'm not making a financially unsound decision just to make USCIS happy...

[Deputy Purple 1,294]

That said... credit cards aren't my main concern. I would like to refinance the house to take advantage of the lower interest rates. I can do it on my own without problem, based on my credit history and income, but I don't think it would look good to USCIS if I did it without adding her to the deed/mortgage. I know they look for both people being on the lease, mortgage, etc. I'm afraid that her lack of credit score would sink the re-fi (or, at least, cause the rate to be higher than it is now in which case there is no point in doing so.)

Either way, she doesn't get added like I would prefer but I'm not making a financially unsound decision just to make USCIS happy...

All Lenders are not equal...

Some will base it on the higher score, some will look at the score of the higher earner. Shop around, her lack of credit won't hurt you in every instance.

That said, as long as you are co-mingling finances and your personal lives I doubt USCIS would use her not being on your mortgage as the reason to deny her.

[Deputy Purple 1,294]

FWIW,

If you want to put Lord Infamous' advice into context, this is an interesting tidbit. When someone advises me to commit fraud I generally discard any advice that follows! Even withstanding that, read the rest of the thread and see how the timeline he presented here is different from the one in the linked thread.

[웃 910]

I hope this is correct. I heard they changed the FICO scoring model a year or so ago to cut down on the effectiveness of "piggybacking" on someone else's credit history.

Last week, I added my wife as an authorized user on two of my credit cards dating back to 1996 and 2001 so we'll see.

If not, I will co-sign an unsecured card for her (like my parents did for me years ago.) I just can't bring myself to give a bank our money (for a secured card) for the privilege of paying them interest (probably at >10%) just to, in effect, borrow from ourselves.

I won't even carry a balance. No way I'm paying them to use our own money!

Well please update how things turn out over the next few months so we can figure out if it works as it did in my wife's case (as well as a few others). From a quick google search it seems to me that they made some sort of decision in 2008 but by summer 2008 they reversed the decision regarding authorized users...I added my wife in late 2009 so I am pretty confident it will work.

Regarding the secured, about the same time we did the secured we did the authorized user thing. So I am not sure if it helped but I think it did help to have her own secured card...I'm not sure what you mean about giving the bank money? You get that money back after 12 months. So it sucks to lose it but when the check comes back in the mail it is amazing. And the interest, if any, will be ridiculously low on a card with a $100 balance....After 12 months we closed the account instead of converting it to an unsecured credit card just because I know they probably would have kept the credit limit absurdly low....

[ryna 132]

I, too, am interested to see how FICO scores authorized users these days.

And, it's true that the interest on a secured card would be practically nothing (and, if I kept the money in my bank account, would earn practically nothing), so it's not a huge deal from a financial standpoint. Honestly, I didn't even know $100 lines of credit existed. The lowest I ever had - and this was in the mid-80s - was $500. You couldn't even use it to buy $20 in gas these days as they pre-authorize $100 at the stations around here...

Will update in a few months....

[threeoceans 0]

Would like to agree and advise others to apply but they declined me... why??? Not enough Credit History!!! They sent me a letter to let me know that since i did not have credit history with the credit rating companies I did not qualify Upshot, and correct me if i am wrong, is that the act of checking my credit history is viewed in a negative light and that applying for this card has put my credit score (non-existant) in a worse place than it originally had been (non-existant). Will call tomorrow to see if I can get some clarification but not exactly happy with this

i tried to apply for the same card and was denied too. ughhhhhh! how to build credit score like that?