Building Credit History

[Dbkrantz 16]

Hi everyone,

My husband and I will be moving to the US pretty soon and are trying to see what the best way to build up credit history would be.

I, as a US citizen born and raised abroad, do not have credit history at all, neither does my husband, so we are starting from zero.

It seems like the banker (who works with several members of our family), will be giving us a secured credit card once my husband's SSN comes through and once we arrive in the US.

My question is: how long does it take to build up credit history and what are your advice for us?

Thanks for your help,

Deborah

[marriott574 13]

It depends on what you want a credit history for. A secured credit card is a good place to start, get a different one for each of you, if you are a named holder of his card then only your husband will build a credit history.

If you ever want a mortgage you will need at least 3 lines of credit, such as a student loan, store card, car debt.

It will take a few years of good credit behavior before you get a good score. Things like paying your cell phone on time also help.

Banks also look at what you buy with your credit card. Some things are better to buy then others for your credit history, groceries are bad, electronics are good. This is because, if you default, then the bank can reposes a new laptop, they can not reposes food.

Also remember, every time you open an account or even apply for a credit card, your credit score is lowered.

Also holding cards and accounts you dont use lowers your score.

Other bad behavior such as missing payments or only making the minimum payment will lower your credit score.

[cathy2904 97]

I also got a secured card and I think that helped but for me the thing that made the most difference was getting American Express to transfer my UK credit card to a US one. My score shot up.

[lost_at_sea 995]

What we've done for me so far is get a joint credit card (against our joint bank account, we use it to pay for furniture for the new house, mostly) and I've got a phone contract in my name.

I'll try for a solo credit card sometime next year, and eventually I'll go on the mortgage too (I'm just on the deed for now, my non-credit would have ruined pur mortgage interest rate).

Edited October 31, 2013 by lost_at_sea

[Harpa Timsah 13,258]

A secured cc is a good plan, it will take around 6 months to populate a credit score. You will have to use the card; if you pay it off every month then you will not accrue interest. Once your credit score exists, then I would get other forms of credit and use them. Good luck.

[Dbkrantz 16]

It depends on what you want a credit history for. A secured credit card is a good place to start, get a different one for each of you, if you are a named holder of his card then only your husband will build a credit history.

If you ever want a mortgage you will need at least 3 lines of credit, such as a student loan, store card, car debt.

It will take a few years of good credit behavior before you get a good score. Things like paying your cell phone on time also help.

Banks also look at what you buy with your credit card. Some things are better to buy then others for your credit history, groceries are bad, electronics are good. This is because, if you default, then the bank can reposes a new laptop, they can not reposes food.

Also remember, every time you open an account or even apply for a credit card, your credit score is lowered.

Also holding cards and accounts you dont use lowers your score.

Other bad behavior such as missing payments or only making the minimum payment will lower your credit score.

Thanks for your answers everyone. I like the idea of not buying groceries, it makes perfect sense.

The secured credit card will be joint, does that mean we will both build credit or do we need one each?

And for the mortgage, we will not have student loans as we both finished our studies. Store cards / car debt are a possibility though. What would be a 3rd line of credit? And do I really need one?

Thanks for all the information everyone, it seems like 6 months would be a good place to start and a year or two would be enough to build up a good credit score for both of us...

[marriott574 13]

Thanks for your answers everyone. I like the idea of not buying groceries, it makes perfect sense.

The secured credit card will be joint, does that mean we will both build credit or do we need one each?

And for the mortgage, we will not have student loans as we both finished our studies. Store cards / car debt are a possibility though. What would be a 3rd line of credit? And do I really need one?

Thanks for all the information everyone, it seems like 6 months would be a good place to start and a year or two would be enough to build up a good credit score for both of us...

The joint CC depends on the account, some accounts are true joint accounts ie both people are signers on the account, (these are very rare.)

Most people are simply named holders of a second card on a CC, if this is the case then only the person who opened the account will develop a credit history.

A good way to tell is, if your husband open the account a while ago then added you to it then you are just a named holder not a signer and thus not gaining any history. The best thing to do is to open your own account. A third line of credit could be a second store card or a bank credit card.

[Dbkrantz 16]

We opened a joint-account together and both of our signatures are required but I am not sure if my husband is added to my name or not...

We might ask for two seperate credit cards if that is the case...

[christeen 966]

I would EACH get a card that way, jointly you are establishing credit... Use them each month (less than 25% of you available credit) then pay them off each and every month!! After 6 months you will have some credit history to build from. Ask for an increase at this time... After another 6 months, (1 year total) open another credit card (store card or another bank card)... Within 1.5 years you should have a decent credit score... But NEVER pay late and be sure to use the cards to maintain the score) Good luck...

[elle13 15]

I am in the process of building up my credit as a new immigrant. I built up a solid credit score in the UK before moving to the US in May 2013. I got my social security card in June and applied for my first credit card. I opened a checking account at Wells Fargo and asked the personal banker if I could apply for a credit card in my own name. I got approved for credit card with a tiny $600 limit, and I think it was successful because I did it in-branch rather than online.

Since then I've tried unsuccessfully to apply for 2 credit cards online. Reasons given were that I did not have a credit history. As a result, I stopped applying for credit lines and just kept using and paying off the one credit card I did have. In 4 months, I got my first "pre-approved" Visa credit card offer in the mail in my name, something which my husband gets (and throws away!) almost every day. I applied online for that advertised credit card and was approved.

So going from my personal experience, as a newly arrived immigrant, it took 4 months of responsible credit card usage before I gained a credit score that is healthy enough for companies to start making me offers.

I plan to wait a few more months before trying to see if I can lease a car under my name. It can easily go under my husband's name as his score is great but I want a third credit line to build up credit history in preparation for any joint mortgage applications in the future.

Baby steps! Hope this help you both.

[elle13 15]

We opened a joint-account together and both of our signatures are required but I am not sure if my husband is added to my name or not...

We might ask for two seperate credit cards if that is the case...

I just noticed you're moving from the UK to Los Angeles too! I made the same move and miss England very much sometimes. Overall, I love my new life in LA though. Hope you and your husband transition smoothly!

[Dbkrantz 16]

Thanks everyone for your help. All this is very important information. I was not aware that it was better to stay under the maximum credit, so that is good to know.

One more question. I plan on buying a car when I arrive and paying for it each month which my Uncle as a co-signer (he has excellent credit). Will that work or will they say that I have no credit history whatsoever and that even a good co-signer will not work?

If it does work, will this build up credit for me or for my Uncle? Of course, I'll be paying each month so we are not worried about his credit score lowering.