Building Credit

[rlogan 2,036]

The credit counseling companies say to go to stores that have lay-away or credit programs (eg 90 days same as cash) if you have no history. Even if you pay all your bills on time and have cash in the bank, if you have no history of borrowing then you will not have a good credit rating, contrary to what someone suggested.

[NASN 1]

I agree it WOULD be an issue but as I have no credit history, I have no points... so what "points" can they take from me? You can't get store cards without a history.. or at least I couldn't by myself so a secured card it is.

You may not have points, but if a creditor sees there are too much inquiries for a short period of time, that's a redflag for them. I only say this because I process credit card applications and qualify loans. Secured cards are good too, it's the best bet you just have to put money up front.

[Messybrownhair 251]

Thanks everyone! I guess hubby and I have a lot of thinking to do. He is wary of credit cards and has always used debit, he has an excellent score. So we really want to get something beneficial. I really appreciate all the responses!

[NY_BX 397]

Would like to ask what is the best way to go about building my credit? I already have my GC and SSN, I am part of a joint bank account, and I will have three household bills in my name starting August. I have been receiving letters from Capitol One and other banks to open a credit card, just not sure which I should get because I am not familiar with the lingo and how to build credit in general. Besides, we have a debit card which we usually prefer to use, so I wouldn't know what to pay for with a credit card anyway? Can someone just guide me in the right direction? My hubby doesn't have a credit card either, just debit, should we get a joint credit account or should I get one separately? Just lost and confused in this matter, any advice would help!

OMG! NOOOOOOOO! Stay away from credit cards. Just get a bill on your name: mobile phone, cable bill, rent (joint lease), electric or utilities bill. That's ok, just pay them ontime. If you have the need to get a credit card, then look for the lowest interest rate for a visa or mastercard. Not stores, please. Do not fall prey of predatory lending.

[Tim/Mav 305]

There are many good posts here about "Where to Start". Re: Establish my own personal Credit History. I have seen many options here, some I agree and some I disagree.

The simple way to begin is Personally See Your Own Banker and discuss with him/her your goal/intention of establishing Credit in your name alone. Generally, they will offer a Secured Visa Issued by Your bank with say a $300.00 limit to start. (This card is in your name) Use it a few times a month and always pay on-time. Generally, what you do is try and add each payday Add over and above the $300.00 to your Visa Card. (However, still using it Monthly and making monthly payments)

It maynot take to long to have $1,200.00 in this account and the Bank seeing regular monthly payments and 4 times the Credit Card Limit in the Account.

If your employed and Tim's and Your Joint Accounts are in Order and currant. You can request a Unsecured Visa or Mastercharge in your name.

The problems with Secured Credit is it don't show always on Credit Reports. This is why I suggest staying with your Bank. One member noted: And I agree, Don't go crazy applying everywhere for Credit. (Red Flag) It is called to many Inquiries and shows on your Credit Reports.

Talk to your Banker to start MBH. (Lol) MessyBrownHair, Long word to type. LOL. Tim

[Harpa Timsah 13,258]

Thanks everyone! I guess hubby and I have a lot of thinking to do. He is wary of credit cards and has always used debit, he has an excellent score. So we really want to get something beneficial. I really appreciate all the responses!

Your husband probably has a great score because he has had the luxury of spending years building it, whereas you are looking to build credit history quickly. Eventually your score would probably go up but it takes a while. I would get a single credit card and use it smartly and just be patient. Also make sure it is no annual fee. The original idea of these scores is that just by living and doing things (utility bills, medical bills, payroll, bank accounts, whatever) a company could see what type of financial situation you are in, but now people are gaming the system a bit because they know the criteria for the scores. The fact that you get Capital One mailers is a good sign, at least you are on their radar! Good luck!

[mike42979 57]

Ok so i have a 780+ credit score and if you want to build credit and cant get approved for loans the best and easiest way to do this is look for a loan from your bank that is secured against your own deposits. For example if you have $1000,00 in the bank and tell them you want to secure a loan for $1,000.00 against your own money then they will give you the loan 100% without issue. This is a good way to establish credit, another point to note is your husband is a military member and i presume might be a member of the Pentagon Federal Credit Union which has one of the best reward credit cards on the market.

I started when i was 18 with a macys card with a $100.00 limit but being young i was stupid and just kept paying the minimum payment, After 6 months they increased my limit to $500 and i maxed that out and eventually by my mid 20s i was $15,000 dollars in CC debt. Now you would think i had bad credit but it was quite opposite, the key is i never missed at least the minimum payment. Now dont make the mistake i made because just last year i cleared the last of my CC debt after almost 13 years lol. In doing so i learned valuable lessons, #1 credit is not evil if used properly and i still use my credit card almost everywhere but i make sure to pay the balance off in full and i do this by making a payment to my credit card every 2 weeks before the bill even comes. I pay my credit card through transfer direct from my checking account and check my statements and balances online at least once a week.

The reason i keep using my CC is in my case to build miles, i have 3 cards and you shouldnt have more than 3. I have 2 old American Express cards that i dont use anymore but i keep open because if you close an old established account it negatively impacts your credit score and i have my current American Express AA advatage card by Citi Bank, They give you 30,000 miles for spending $750.00 on the card the first 4 months and i am about to get my free round trip ticket to Philippines with 70,000 miles, im at 65,000 now .

Anyways im rambling now and the point is if you get a card the most important rules are Pay on time all the time and if possible PAY IN FULL.

The advantage to having good credit is peace of mind and security knowing that if i have an emergency i can get a loan at any time i need. GOOD LUCK!

[VanessaTony 3,567]

OMG! NOOOOOOOO! Stay away from credit cards. Just get a bill on your name: mobile phone, cable bill, rent (joint lease), electric or utilities bill. That's ok, just pay them ontime. If you have the need to get a credit card, then look for the lowest interest rate for a visa or mastercard. Not stores, please. Do not fall prey of predatory lending.

Electricity added me with no history and because I was "clean" I didn't have to pay a deposit (thank goodness!) but that company doesn't report to the credit bureaus (small town thing maybe). I can't go on the phone bill because I don't have a history... well that's a lie, I COULD but I don't because it's about a $400 deposit (which we could afford but when I didn't have a job we couldn't and that's a lot of money to just tie up for a year). We own a house and again, I couldn't go on the mortgage thanks to zero credit history because the interest rate would have been horrendous. Store cards wouldn't because of no history (tried Kohls but happy that was denied because I read some AWFUL reports about them afterwards). So the secured card for someone with zero history is a good idea. Capital One offers a $200 card for a $49 security deposit and I can handle that. Credit cards ARE scary though. It's too easy to let it get away from you so I'm sticking at $200, maybe $500 max for emergencies and paying on time is a MUST. once my credit is great then I might get rid of it. I'm lucky a have a great job with amazing benefits and great pay, especially right out of the gate so once the credit thing is "handled" I'll feel normal

[atm 8]

It is very important to build a credit history in the US. You are nobody without credit!

I had a sizeable savings balance (at Citibank), had always paid my cell phone and utilities on time and always used a debit card. I wanted to open a couple of storecards, because you get a decent discount if you use them. I was denied credit over and over (storecards, banks, etc.) initially, and was told that I need a credit history and credit score. This was despite having been in the US more than a couple of years. I was told that a savings account in good standing, and utilities bills didn't count for credit history.

At Citibank I was in the ridiculous position of having to borrow $500, and paying the loan off over one year, against which, they made me deposit $500 in a certificate of deposit (which I couldn't touch). When I asked the officer at Citibank whether he thought this was ridiculous, he told me he applied for a Citibank credit card, and had to provide proof of his (Citibank) income! After that year, I received a Capital One card with a $750 credit limit, and after another year I was approved for a couple of store cards. Now I have a slew of them. If you look carefully, they have good rewards programs, and no annual fee.

What you really want to aim for is a high credit limit (not a low one) so that your debt (credit used) to available credit ratio is low. This increases your FICO score. Even if you spend $990 per month of a $1000 credit limit and pay it off fully before they charge interest, it is NOT good for your credit score. Of course, you should always pay the credit card off at the end of the month, and you must be super disciplined not to overspend. Opening too many cards at once also hurts your credit score. Number of years of credit history is also very important, it takes time.

I found that after several years, the amount I had to pay for home insurance decreased (as I had a credit history). It's funny, but savings do not seem to count in the US. Debt is what counts, and most people live on credit. I was brought up to live below my means and to save for a rainy day - this is not how the average American thinks about money, in my opinion.

[bigdog 376]

Would like to ask what is the best way to go about building my credit? I already have my GC and SSN, I am part of a joint bank account, and I will have three household bills in my name starting August. I have been receiving letters from Capitol One and other banks to open a credit card, just not sure which I should get because I am not familiar with the lingo and how to build credit in general. Besides, we have a debit card which we usually prefer to use, so I wouldn't know what to pay for with a credit card anyway? Can someone just guide me in the right direction? My hubby doesn't have a credit card either, just debit, should we get a joint credit account or should I get one separately? Just lost and confused in this matter, any advice would help!

Use sparingly and pay off just before due date, so their are no charges. You can get individual and joint accts.

[Gosia & Tito 199]

Hi Messybrownhair:

Same predicament here..lol!

I did some research on how we (new immigrants) can build credit here. There are 3 ways:

1. Apply for a secured credit card as suggested by Maxximus..

2. Try Capital One. They actually target our group.. They have reasonable rates. Also, some VJers got approved and that sounded encouraging.

2. Try to get a regular credit card (I got a fIlipina/accountant friend in Cali who got hers from Bank of America without a credit history...it's a funny story and she was lucky! She was initially denied but she asked to speak to the Manager. She asked them why she was denied. Obviously, no credit is the reply. So she gave it back to them.."tell me how I can build a credit here if no one will give me a credit card?" The Manager approved it!)...who knows?!

3. "Piggy backing" - find someone willing to make you an extension of their credit card..someone with a good credit history, of course, who can trust you and you can trust in return. I forgot how this can be the "fastest" way for you to build your credit but it was considered to be the fastest one. I got my aunt to do this for me once I get my SSN.

Also, I would be wary on applying for credit cards offered in schools and even shopping cards (Macy's, Target, Walmart, etc)..if ever I'll get just one just to help with the credit building.

I am very pragmatic and disciplined when it comes to spending.

Appreciate all the inputs of the other VJers here...means much!

Happy July 4th, everyone!

prep.mac

My Timeline:

10/2009 - met online

11/2010 - came here on B1/B2 visa

12/2010 - first meeting in person in Chicago, IL

03/2011 - moved in with him in IN

4/25/11 - got married in Mitchell, IN

5/02/11 - sent AOS packet (I-130/I-485/I-765) to Chicago Lockbox

5/04/11 - AOS packet received by Chicago Lockbox

5/23/11 - Received NOA for RFE (I-693)

5/27/11 - Sent RFE to DHS Lee's Summit, MO

6/02/11 - DHS Lee's Summit received REF reply

6/06/11 - Biometrics done at Louisville, KY as per NOA schedule

6/24/11 - Received NOA for July 25 interview in Indianapolis, IN

6/30/11 – Received text and email messages EAD card on production

I-130 Petition for a Minor Child of USC

6/25/11 - Sent I-130 packet for stepchild

6/27/11 – USCIS receipt date

6/28/11 - Received text and email messages stating USCIS received it and moved case to CSC for processing

7/01/11 - Touched

7/02/11 – Received NOA1

Here is what I did:

Since the time of engagement (a couple of months before sending the I-129, asked a couple of my CC providers to issue a card on my fiancee name. Also, I had opened a couple of new cards in the meantime and of course, they want to know if I want to add someone else, so I did.

I was initially thinking on giving one of the cards to her for expenses, but looking at the fees they are charging these days for international transactions, I decided to just send money when needed.

I did use the cards for a few charges here and there, so there is activity.

End result was that, her name is now on lists, so I already get all sorts of mail, inclusive one CC offer already (we are about to go to the interview), so by the time she gets here, she would be able to open her own card. I will of course do the joint ones on top of.

[happyblessedme 12]

Would like to ask what is the best way to go about building my credit? I already have my GC and SSN, I am part of a joint bank account, and I will have three household bills in my name starting August. I have been receiving letters from Capitol One and other banks to open a credit card, just not sure which I should get because I am not familiar with the lingo and how to build credit in general. Besides, we have a debit card which we usually prefer to use, so I wouldn't know what to pay for with a credit card anyway? Can someone just guide me in the right direction? My hubby doesn't have a credit card either, just debit, should we get a joint credit account or should I get one separately? Just lost and confused in this matter, any advice would help!

Too many is not good. I start with capital one and home depot .Make sure u pay it on time so no late fees being charged.

Edited July 3, 2011 by happyblessedme

[newlyweds2010 208]

Actually you should also always try to pay the whole amount at the end of each period. You can still pay in installments, but you will end up paying much more than the original price because of the interests.

[Bsze 50]

FYI: Rental, utility and mobile phone companies DO NOT report to the credit bureaus (FICO, Equifax, Transunion etc) and does nothing to help build credit score. They MAY look at your credit score to determine if they will sign a lease with you or a mobile phone contract. Debit cards don't count either. Store credit cards are a good way to establish credit, providing you are careful to pay it all on time. But that rings true for all credit cards.

Here's how they calculate your credit score.

1) 35% of your score is determined by payment history - i.e. if you pay on time, every time, your score will look good.

2) 30% is determined by debt usage - the ratio of your debt to your available credit. The lower your debt usage the better. But no debt isn't a good thing either you want to be show that you can pay off your debts. Having none doesn't help that cause.

3) 15% is determined by credit age - the longer your credit history, the better it will be. This naturally takes a few years. But I've seen people with a credit history of 5 years with scores of 750 and above.

4)10% is determined by account mix - your score will be better if you have a variety of credit accounts such as multiple credit cards (financial experts say that 5 to 6 is actually a good number - why anyone needs that many is still beyond me), mortgage, auto loans, student loans and so on.

5)10% is determined by the number of inquiries on your account - the fewer the better, but while having a few inquiries in a short period of time might ding your score, it doesn't take long to bounce back.

Hopefully this information helps you understand the credit history process better.

How I got started with my credit history was through our home mortgage. My husband has an excellent score (due to his diligence in paying on time despite a lot of overspending in his college days), and I piggy-backed on his.

Edited July 3, 2011 by Bsze

[M_A 0]

Well, there are a couple of things you can do to build your credit. First, you can get a credit card and use it at least once a month as long as you don't go crazy with it. Charge something and try to pay it right away. You mentioned that you and your husband has a debit card. Try to go to your bank and see how much is the APR (Annual Percentage Rate). Usually if you go to your own bank you get less APR. APR determines how much money you'll pay tomorrow for the purchases you make today. The lower the APR, the better. Anything lower than 17% APR is good but might be hard to get since you are just starting to build your credit. Lower APR credit card usually comes with higher late fee charge so be careful. Another way of building your credit is by paying your utility bills on time. They do report your credit through the credit bureau.

You can get a joint account or your own account. But I do suggest that your husband start building credit soon. Credit history can have a big impact when it is time to get those big loans. If you do not have any credit build, it will be hard to get a car loan or a mortgage loan. Anything that you get approved for will have a high interest rate.