Establishing Credit - tips and tricks please

[Stuart and Thea 95]

Okay, so our credit good or bad, doesn't follow us when we move here. Yes, there is some wiggle room with some big companies using your foreign information to check in a foreign country, and sharing it that way. But the laws about sharing credit information between countries are very specific, and considering that the people here we want a loan from can't access any foreign assets to recoup loss if we default, most of them don't care to bother with checking. For some of us this is good, for some of us this is bad.

I think those who have gone through from zero credit to a good credit, using means to establish credit available to anyone here in the US should post their tips and tricks to help us out.

I'm at the beginning of the battle, but a bad divorce prior to meeting me left my husband with some bad credit, so piggybacking on his, even as an authorised user on a card,isn't really great for me, so I'm going it alone.

I've applied for one of the secured credit cards that have lower fees, and report to all of the credit agencies. This last part is crucial, don't just go for a prepaid credit card, they can help you get a reservation at a hotel, but they don't do anything for your credit unless they report to the agencies, so do your homework before you choose what card to look at! I went for Capitol One's Secured Card, and hope to hear from them soon!

Funny, I couldn't access a report at all on me with the credit bureaus, and found out that they don't even generate a report for you until they have 6 months of reported information from someone who has given you credit, so clearly, you have to have credit to get credit in most cases, so putting money into a secured credit card is one way to start, and in 6 months, you can ask them to change it to a regular card and get your deposit back.

Things to remember when improving a score here in the US, is to pay off your balance as often as you can, even before it is due, especially if you are planning on looking for more credit soon. They will pull up that you have a balance, even if it's not due yet, and if your total owed equals more than 30% of your credit limit, then your score will be lower. On a 500$ card, 30% is only 150$! If you're using it regularly to pay for groceries, even if you pay the balance in full before the due date, you can come pretty close to that limit before the due date, and if you need to have your credit checked, it's going to show. It's MUCH better to have another card and share the costs between them, allowing 300$ a month before you hurt your score, or even better, to use the card, then go home and pay the bill over the phone immediately. Remember, you're using the card to establish credit, not to really be credit.

Another way that I am establishing credit, is that I purchased a Certificate of Deposit at my local bank. I then used it as collateral for a loan, which I am using to pay off the loan. As long as I pay off the loan every month over the six month course that I have the CD, it will establish some credit history. I may continue to reroll this until I like my credit score.. and I am also having my husband do the same to repair his own score.

Anyone else with tips and tricks of how they are doing it, or how they did it to share here? I'm pretty sure it will be a useful tool for everyone!

[Inky 1,110]

Husband put me on his capital one credit card when I moved to the US and after a couple months, I had 6 years of good credit history when I checked my credit. Had 0 credit when I originally moved here.

Not long after that capital one sent me my own offer and I got my own credit card which is not shared with my husband which I use for larger purchases for credit building.

[Dave&Roza 748]

Have the USC spouse add you to a CC. Also if your spouse has assets in the form of stocks, bonds, mutual funds, etc have your name and SSN added to those as well. It will take about 3-6 months but those CC offers will start rolling in as you get the credit of your USC spouse. At least that is what happened when we added my wife to all our accounts. She now get 3-4 CC offers per month for those pre-approved CC. She is like me and we shred them. This will also help with tthe ROC stage as it will show co-mingling of your lives. This only works if the USC has a good to excellant credit score. If the USC credit score is not good then you both will have to begin to slowly build your credit history--like you are currently doing.

Good luck,

Dave

[vosnmars 25]

I am a USC, but what I learned is to be diverse and not just credit cards. It can take time, but it will slowly build. When the time comes, try to expand to have a checking account, savings, credit card, car loan, mortgage and any other accounts. I have 2 of each minus the car and mortgage and just my basic utility accounts of electric, phone, gas, etc and my credit is very good.

Edited June 24, 2012 by vosnmars

[N M 96]

I went from absolutely no credit in December 2009, to an 800 FICO score and a mortgage just 18 months later.

It's simple really:

• If (and ONLY if) your spouse has good credit, get yourself added as an authorized user on their cards.
• Build slowly - don't apply for too much credit too soon. Too many applications in too short a period will reduce your score.
• NEVER miss a payment. ALWAYS pay on time.
• Pay your balance in full every month
• Don't borrow more than 40% of your credit limit at any one time.

[VanessaTony 3,567]

I got a Capital One secured card and 4 months later my score was in the high 600s. A couple of months later 700's. I need to get more "lines" of credit though so I'll be getting another card soon and eventually a car loan.

[VanessaTony 3,567]

so putting money into a secured credit card is one way to start, and in 6 months, you can ask them to change it to a regular card and get your deposit back.

Where did you hear/read this? I read online (though I can't find it now) that after TWELVE months they'll change it to a regular card, not 6 months.

[Stuart and Thea 95]

Lol, I chatted with a rep, who said they periodically review accounts for graduation from secured to unsecured, but they don't have a timeline on when to do it, but certainly by 18 months all accounts should be reviewed. He recommended that I put in a high deposit and pay on time and ask them to review it starting at six months. If in that time my credit history has improved enough, they would consider graduating the card. I guess it's a case by case thing, but it still sounded good to me.

In reading on the web, it seems that at that time, they would simply try to get you to qualify for an unsecured card... not sure what to believe now :/

Edited June 24, 2012 by Stuart and Thea

[VanessaTony 3,567]

Lol, I chatted with a rep, who said they periodically review accounts for graduation from secured to unsecured, but they don't have a timeline on when to do it, but certainly by 18 months all accounts should be reviewed. He recommended that I put in a high deposit and pay on time and ask them to review it starting at six months. If in that time my credit history has improved enough, they would consider graduating the card. I guess it's a case by case thing, but it still sounded good to me.

In reading on the web, it seems that at that time, they would simply try to get you to qualify for an unsecured card... not sure what to believe now :/

I'll have mine for 12 months in a week or so. I was going to call then about it.

[M&Pooh 12]

I went from absolutely no credit in December 2009, to an 800 FICO score and a mortgage just 18 months later.

It's simple really:

• If (and ONLY if) your spouse has good credit, get yourself added as an authorized user on their cards.

That's interesting... Last week we stopped by at the Chase branch and chatted with a rep ( I mean, a "banker", not a tellet/cashier ) He told us precisely the following - a card holder can add anyone to his account, Chase will even not care about the SSN for this person, the account holder is still the only responsible party for all the transactions and THE CREDIT HISTORY OF THE ADDED PERSON ISN'T AFFECTED IN ANY WAY. When I asked what would be the scenario when somebody is added as a JOINT ACCOUNT HOLDER, the rep was not certain about the consequencies credit history-wise.

Not sure if it holds true but that's the conversation we had. The guy seemed to me to know what he's talking about...

[carocaro 22]

Upon marriage, I immediately applied for a prepaid Bank of America credit card and they held cash in the full credit amount. I used it every single month and paid for it on time. While it was a small amount of credit, I used it to the max almost every month and paid it off entirely. Bank of America Visa told me absolutely do not pay off more than the amount every month and do not ever make it into a credit balance. That is a red flag for them for money laundering. (surprise to me) At the 12 month mark they gave me back my cash and increased my limit and I had a credit rating :-)

[Inky 1,110]

That's interesting... Last week we stopped by at the Chase branch and chatted with a rep ( I mean, a "banker", not a tellet/cashier ) He told us precisely the following - a card holder can add anyone to his account, Chase will even not care about the SSN for this person, the account holder is still the only responsible party for all the transactions and THE CREDIT HISTORY OF THE ADDED PERSON ISN'T AFFECTED IN ANY WAY. When I asked what would be the scenario when somebody is added as a JOINT ACCOUNT HOLDER, the rep was not certain about the consequencies credit history-wise.

Not sure if it holds true but that's the conversation we had. The guy seemed to me to know what he's talking about...

Because only VERY few companys do this now. They would have to take the SSN for you to get any credit scores out of it.

[M&Pooh 12]

Because only VERY few companys do this now. They would have to take the SSN for you to get any credit scores out of it.

This is what I think, too: this happens, but not as a general case ( contrary to some other comments here ). Now the million-dollar question would be - WHAT ARE THOSE BANKS THAT ACTUALLY PRACTICE THIS APPROACH and allow one build a credit history by being added to a seasoned account in good standing?

[Kazulie 132]

Where did you hear/read this? I read online (though I can't find it now) that after TWELVE months they'll change it to a regular card, not 6 months.

I'm a USC but have bad credit just the same. I paid off all my debt in the summer of 2010 and had been just sitting around waiting for my credit score to go up. Well, it wasn't. Didn't move for 2 years. I went to my bank and opened up a secured credit card with them. Overnight my credit score jumped 35 points. I only spend $10 on it once a month and pay it off online the day I spend it. I haven't had the card a month yet but I'm hoping every month it will go up a little bit.

My banker told me that in 6 months I should go back and he will see if the bank will switch me to a regular credit card.

Either way, it doesn't really matter. The credit bureaus only see it as a credit card. They have no idea if it's secured or not. But it would be nice to get my deposit back.

[sabi 148]

very nice threat!

What would you guys suggest when a future spouse has a bad credit... should he add me to his account when we get married or should I just open my own and how will it look at the AOS interview, shouldn't we have the same account etc?