Building credit and applying for a mortgage

[photog82 1]

I was hoping someone who has been in our shoes, could give me a ball park idea of how long it takes to build enough credit to get a decent rate on a mortgage because my husband and I would like to buy a house in the next year or two. I’m wondering if that would be possible since he doesn’t have a credit rating. I have a great credit score, but don’t earn that much. He should be able to earn more than I do, but obviously has no credit since he just moved here on a k1. We’re taking all the steps we’ve read to build his credit. I just want to know what a realistic time frame is, as I’m sure there are plenty of other people who have been through it also. Any comments are appreciated. Thanks!

[Mela17 36]

We are in the same boat as you. Hopefully someone will come along and enlighten us.

[marriott574 13]

Ok So i am in the same boat but know about finance.

You have several options

1. Open an american Credit Card and wait 6 to 12 months to build credit.

2. If you still have an UK Credit Card see if they have an american bank to transfer you to. EG Capitol One has both and English and American Bank this can help transfer some of your Credit history to the USA faster. Then use the american Credit Card for 6 months.

3. Harder but ask your bank to try and transfer your credit rating to the USA from the UK I have not found a way to successfully do this.

4. Apply for a mortgage at a bank with a UK arm and ask them to pull from your UK credit file.

5. Get added to your spouses loans, eg car loan, phone plan and utility bills. The more financial history you have the better.

[kzielu 1,149]

Realistic time frame - 2-3 years assuming your spouse has decent credit - and remember that it's not just a score that's important as you can see people here posting score in excess of 700 after a ~year but a length of history and how it was built.

Best way to start (IMO) is to get a joint credit card with spouse (especially if you have a good score) and don't bother with $500 secured credit cards with 50%APR...

[Ontarkie 14,499]

~~Moved to Moving Here and Your New Life In America, from Effects of Major Family Changes on Immigration Benefits~~

[DJ&L 83]

Just to parrot what was said earlier. You need to find ways to get and use credit. The key is to not only have credit but also utilize it. I would suggest adding your husband to any credit accounts you currently have. You can also sometimes get lines of credit for your bank. Credit Unions are often easier to deal with for lines of credit or for car loans or even credit card offers. But again, there's really no substitute for opening credit accounts and using them...responsibly of course.

Credit scoring looks at many things besides payment history. They look at length of time, available credit, utilization rate, max credit limits and number of credit inquiries....among other things.

Good luck!

[coldwatersurf 5]

I moved here 6 yrs ago. When I started back then (when the market crashed), getting approved for a mortgage was easier for us and the interest were really low. My husband had terrible credit, and I had none. It took me approximately 2 years to clean up his credit and to build mine. When our credit score reached around 675, and when we were able to save 5% of what we needed for a downpayment, we were approved with Wells Fargo.

We couldn't have done it w/o his friend cosigning for us for a tire account. The tire account would send our monthly balances to the 3 major credit reporting agencies. We waited about 6 months. Then, I started getting credit card offers. I applied for a credit card with a limit of $250. 2 months later, they offered to increase my credit at $500. Then, so on. The trick is, leave your credit limit to where you can afford to pay it b/c it was soooo hard for me to find a job. I relied on getting a job by knowing people and using my "charm". lol. Once I got one professional reference (even for a part time/on call job), I was able to get other interviews. Living in a town w/o diversity is difficult, and all of my professional references were foreign... and they were all canadian. But, all you need is an interview. Of course, I learned a lot more about how credit works when I worked for a collection agency for 1 year as the person reporting credit.

so, I used all our personal and professional references to increase our chances to get approved for a mortgage. I was not permanent resident status at that time. I still had to lift the conditions for my immigration. But, once I explained everything, and how I established my residency, it was not that hard. it took us 1.5 months to find a house, get approved for mortgage, and move in. Just get your downpayment and organize your paperwork.

[dwheels76 5,469]

I moved here 6 yrs ago. When I started back then (when the market crashed), getting approved for a mortgage was easier for us and the interest were really low. My husband had terrible credit, and I had none. It took me approximately 2 years to clean up his credit and to build mine. When our credit score reached around 675, and when we were able to save 5% of what we needed for a downpayment, we were approved with Wells Fargo.

We couldn't have done it w/o his friend cosigning for us for a tire account. The tire account would send our monthly balances to the 3 major credit reporting agencies. We waited about 6 months. Then, I started getting credit card offers. I applied for a credit card with a limit of $250. 2 months later, they offered to increase my credit at $500. Then, so on. The trick is, leave your credit limit to where you can afford to pay it b/c it was soooo hard for me to find a job. I relied on getting a job by knowing people and using my "charm". lol. Once I got one professional reference (even for a part time/on call job), I was able to get other interviews. Living in a town w/o diversity is difficult, and all of my professional references were foreign... and they were all canadian. But, all you need is an interview. Of course, I learned a lot more about how credit works when I worked for a collection agency for 1 year as the person reporting credit.

so, I used all our personal and professional references to increase our chances to get approved for a mortgage. I was not permanent resident status at that time. I still had to lift the conditions for my immigration. But, once I explained everything, and how I established my residency, it was not that hard. it took us 1.5 months to find a house, get approved for mortgage, and move in. Just get your downpayment and organize your paperwork.

OMG you are awesome. Does your husband know how blessed he is!! You need to run a class and teach this to people. WOW I am in awe at your tenacity. I love Canadians .

[coldwatersurf 5]

Thank you. It was definitely a collaboration of hours of research including a lot of reading from Visa Journey I was able to pick up tips from different immigrant situations.

But, I really think it would have been harder to establish credit if my husband's friend did not cosign for us. he cosigned for us for 6 months. I asked the accountant at the tire company if our friend can be released as the cosigner as soon as our credit status was stable.

The only other way we could have bought a house (i think) was save a lot of money for a downpayment and apply at a credit union. When applying for a mortgage, there are a lot more that needs to be considered... not just your credit score. For example, what's your income level? how long have you been at your employment? How much are you trying to borrow? Can you afford the mortgage?

At that time, my husband has been at the same company for 5 years, and I had many different jobs in one year (b/c I had multiple part time jobs). I had one employer that I was with for 2 years (seasonal), and promoted to manager position. After 3 months of being a manager (permanent full time), that's when we applied for the mortgage. By that time, we shopped around for the right house to buy. And we found a house that was about to go through a foreclosure and we put our name right at the top of the list. And, we waited for it to be added to the market. We also chose a realtor before we applied for the mortgage.

It's a waiting game. so while we waited, I got as much stuff organized as possible.

[chaine1 116]

After living abroad for 5 years, my husband and I (the USC) arrived in the USA in July 2012. I assumed, like you, that it would be near impossible for us to buy a house together, but by November 2012, we had jointly purchased our home.

According to the loan officer, adding my husband to my credit card was responsible for boosting his credit score into a range where he could qualify for a home loan. I don't know why this worked for us, and not for others.

I made a post about this at the time, you may find it helpful. Link.

Good Luck!

[gwenstar 66]

Another way to build up credit is to take out a loan - for instance borrow against a car or something tangible through your bank or make a purchase for an item on a store card, like furniture. It is good to have both types of credit - I know I have been turned down for having a disproportionate amount of open-ended credit vs fixed term credit. Something like a loan or credit line for an item sometimes can be easier to get, since they have something they can reclaim. For instance get approved for a $250 store card and as you pay things off they generally up your limit. And with store cards sometimes they have incentive like 6 months interest fee. You pay it off, no extra fees, and you get better credit. Yay.

And like people have said above, get added to your spouses bills, credit cards and such (as long as they have good credit!). Some bills are not reported to the credit agency unless they go delinquint such as utilities, phone, cable. Kind of sucks that you don't get good credit for paying those, but if you don't then it reflects badly.

As far as I know and have researched, the US will not transfer credit from another country - even Canada! They use some of the same companies, but they have different criteria. Total bummer because my husband has great credit but has to start over here.

https://www.bettermoneyskills.com/AllAboutCredit.aspx?s=10

Fixed-term credit is a loan for a given period of time, which must be repaid within that period. The most obvious example is a mortgage – even if you re-mortgage or extend the mortgage, you will agree to repay the loan in a set time. Often, fixed-term credit is linked to a specific purchase and the money cannot be used for anything else – for example, a car loan or store finance for a fridge freezer. When the total amount has been repaid, the account is closed.

Open-ended credit is generally issued with no time limit on the account and is not linked to a specific purchase. Instead, you are given a credit limit and can spend up to that amount each month, minus anything you owe or interest that has been carried over from previous months. Every time you pay back some of what you have spent, plus any interest you have run up, you have that amount available to spend again. This is how credit cards work.

If you fail to make minimum monthly payments or don’t make regular payments to reduce the balance, in line with the terms and conditions you have agreed, the lender may stop you using the account. If you only pay off the minimum each month, it will take a long time to clear the debt and you will pay substantial interest. Overdrafts are another example of open-ended credit, which is also called revolving credit.

Edited March 21, 2014 by gwenstar

[gwenstar 66]

To clarify about "transferring credit" i mean transferring a "Credit score" or equivalent.

Like Marriot457 said, if your bank has an american branch you can work with them regarding transferring account to the US.

[EmigratingSwede 16]

My wife added me as an authorized user to her credit cards even before we were married (a year or so before we moved to the U.S.). About six months after we moved I had a credit score of 760. Our problem was not the credit score. My wife made no money so I (the immigrant) had to be the one to get the mortgage and that was REALLY hard without having two years' worth of W2 tax forms. I ended up getting a mortgage from a credit union but at .25% higher interest rate than what I would have gotten otherwise. 3.75% feels pretty good right now though :-)