Building Credit Score - Tips & Tricks

[SimonBelgium 49]

15 hours ago, Stark44 said:

Is there an expected ballpark range of what your credit score may look like after 6 months?  If you spend under 50% of your card allowance and pay it back immediately before your statement is due does this help build your credit score quicker ..is it the higher the spend and then paying it back immediately on the credit card that builds credit or is it more so having consecutives months of paying back on time that improves your credit score?

Make sure you carry less than 30% on each card. Ideally, less than 10%

 

There are a number of factors that make up your score, see the first post in this thread. The most important one is payment history.

But one card won't do it. Your score may be good, but lenders won't touch you, because you have no portfolio of credit, nor do you have a long history.

So you want to make sure you open several accounts (2-3 credit cards, a car loan, a mortgage, maybe a personal loan, student loan, etc etc) to build a portfolio, and then just wait to build history. Under 2 years, most lenders won't like you much, but building a personal relationship with the senior loan person at your local bank or credit union, can do wonders.

[Bernardo Machado 0]

On 1/3/2020 at 7:51 PM, SimonBelgium said:

Getting your SSN and Driver's license may take a few weeks, so keep a close eye out so you know what to do when and where. I think you can go to the Social Security Office in your area with the stamped I-551 in your passport within 48h after arrival, to apply for SSN. Once you have that, you can get your driver's license (study for the test!), but you can also get an ID card, which may be faster (I did that). Once you have that, open a bank account and get a secured credit card. Whichever $ amount you can spare, $500 or so is enough if need be.

That would be your first line of credit.

 

You can also get a secured personal loan. For instance, deposit $2,000, and you get a $2,000 loan against it. You basically get your money back right away, but you pay off the secured deposit. You need to keep that loan for at least a year to be safe. So you could make it 12 installments or more, doesn't matter. That's your 2nd line of credit pretty much right away.

 

Usually, after a few months, you'll start to get pre-approval letters in the mail. Be selective, but it's OK to get a card with some benefits you'd actually use regularly. Don't open too many! 

 

A recent change allows you to report other types of revolving credit as well. Mostly utility bills or rent. They have to be in your name though!

 

If you're buying a car, it can be tough with no credit history. My local credit union did finance my first car here, but being able to go in and talk to an actual person to explain your situation, helps a lot. Big bank lenders won't touch you without a decent credit report.

 

To rent a place, they basically want to see your credit history is clean. No late payments, bankruptcy etc. Often, landlords want to see high credit scores, but an extra month's rent as a security deposit usually helps. If you go to an apartment complex, they are usually easier to work with, compared to individual landlords renting out a house.

 

$5,000 is NOT a lot of money. As soon as you have an SSN, go find a small job locally. The $5K will likely be barely enough to get your rent sorted once you move. So save up, because you'll need a car, insurance for car and house, rent, security deposits (also with little credit history, utility companies may ask for a security deposit), health insurance, food, gas, moving to Houston, etc... When you have a job, usually after 2 paychecks, you can use that to show income, which can help you with loan applications and rental applications.

 

Don't forget to file your change of address when you do move out of your friend's place.

 

You can transfer money from your foreign account into your new US account using Transferwise, link is in my signature below.

Don't forget to keep credit card utilization below 30% of available credit, but ideally between 1 and 10%.

 

In short, 2 lines of credit can happen quick. Whenever you buy a car, finance at least part of it and make sure the lender reports into the credit bureaus (Some of the "No credit, bad credit, everyone is approved" places don't report loans). 

When the pre-approvals come in, pick one that will give you a benefit you use often, for example Costco if you shop there regularly. PayPal is actually a pretty good one to get as well (PayPal Credit and/or PayPal MasterCard), but again, wait a few months.

 

Use CreditKarma to start tracking your credit score. It will appear high pretty much right away, but it will drop once you get real credit on there. Over time, it will go back up to over 700.

Hi everyone and thanks a lot to Simon do expose all your knowlegde.

 

 

My doubt is about online/digital banks.

 

 

Any rule is different for this digital banks? Can I chose one of them, thinking first in fees?

 

[SimonBelgium 49]

4 hours ago, Bernardo Machado said:

Hi everyone and thanks a lot to Simon do expose all your knowlegde.

 

 

My doubt is about online/digital banks.

 

 

Any rule is different for this digital banks? Can I chose one of them, thinking first in fees?

 

Bernardo,

 

Online banks are fine if you want to use them. But a local Credit Union (CU) is often best, as you can build a personal relationship with the people there, especially in the financing department.

Most fees are irrelevant, as regular use is often free as long as you keep a certain amount in your accounts.

[Bernardo Machado 0]

On 9/17/2020 at 1:55 PM, SimonBelgium said:

Bernardo,

 

Online banks are fine if you want to use them. But a local Credit Union (CU) is often best, as you can build a personal relationship with the people there, especially in the financing department.

Most fees are irrelevant, as regular use is often free as long as you keep a certain amount in your accounts.

Hi Simon,

 

thanks again for the advices.

 

In Brazil this digital system of bank is widespread a long time ago, and I'm used to get only things is automatically offer by bank's algoritms. What kind of advantage this personal relationship in local CU's can give us?

 

And credit cards offer digitally by mega store, like Amazon card by Discover flag, is it count in the same way of phisical store or bank credit cards?

 

I'm already a costumer of this store, even living in Brazil. At this time outside US,  until my process become "current date" (maybe in next few years), anything of this credit hystory could be availed?

 

 

Tks agains.

 

 

[SimonBelgium 49]

Foreign credit history does not count in the US.

I had never even written a check before I moved here. The US banking system is horribly outdated, and the credit system is NOT in favor of the consumer at all.

The downside of any bank where you do not have the opportunity to talk to someone in charge, is that it's a computer system that will decide if you get a loan or not. And even if you've never missed a payment and make more than enough money, they computer algorithm for the credit rating will decide you're a huge risk, and you won't get a basic loan.

 

With a local CU, you can actually go into the local branch, and talk to the person in charge of loans. Once they understand you're a hardworking stand-up person, and you're just a new immigrant, they can sometimes make an exception against what the computer is telling the clerk what to do.

 

Any line of credit is fine, but there are rumors that the credit cards offered by stores will be counted less valuable, in the future. But the biggest thing you'll fight for the first 5 years at least, is "Average age of accounts".

[SusieQQQ 11,586]

On 3/18/2020 at 9:42 AM, SimonBelgium said:

So you want to make sure you open several accounts (2-3 credit cards, a car loan, a mortgage, maybe a personal loan, student loan, etc etc) to build a portfolio, and then just wait to build history. Under 2 years, most lenders won't like you much, but building a personal relationship with the senior loan person at your local bank or credit union, can do wonders.

You don’t need to go overboard on the variety of loans. My husband and I had 2 credit cards apiece and put both our names on a car loan. You’re correct that time and keeping outstanding balance low is the biggest factor (ours are all auto paid so no payment history issues), but those accounts alone have been enough to get our scores to the 800s. We really only have a credit score to use for those companies like cellphone companies that insist on one...maybe if you are actually using it to get more and more credit then you need more loans, we are just naturally debt averse though. 

 

Re foreign credit history not counting: Curiously, our cellphone company (Verizon) was somehow able to see and use our foreign credit score when we got here. No-one else did and I’ve never seen anyone else mention this, other than those from countries with “portable” AmEx credit scores, which I know a few people have used successfully. 
 

 

Edited September 22, 2020 by SusieQQQ

[Fr8dog 312]

Like most I had no credit when I came here. As I did not really needed credit and we were wondering how long it would take to get credit. I decided to start an experiment without using the Mrs. credit.

 

I got a checking account and a secured $300,= credit card. I used the card whenever possible and than paying of the balance in full at the end of the week. It took 3 months for a credit score to show up. After 1 year I was able to transfer the secured card to an unsecured card. At the same time I applied for another card and was approved. ($3000,= limit). I started using that card and again paid the balance in full again every week. After 2 years my score went from 0 to about 700. After 3 years I got a car loan and another card.

I'm almost 4 years in now. My score is around +750. I still pay my balance of in full every time (if only to avoid the interest) and make sure to use all my cards about once every 6 months just to keep them active.

 

So you can go from 0 to 750 in 4 years without any help.

[Bernardo Machado 0]

On 9/24/2020 at 12:21 AM, Fr8dog said:

Like most I had no credit when I came here. As I did not really needed credit and we were wondering how long it would take to get credit. I decided to start an experiment without using the Mrs. credit.

 

I got a checking account and a secured $300,= credit card. I used the card whenever possible and than paying of the balance in full at the end of the week. It took 3 months for a credit score to show up. After 1 year I was able to transfer the secured card to an unsecured card. At the same time I applied for another card and was approved. ($3000,= limit). I started using that card and again paid the balance in full again every week. After 2 years my score went from 0 to about 700. After 3 years I got a car loan and another card.

I'm almost 4 years in now. My score is around +750. I still pay my balance of in full every time (if only to avoid the interest) and make sure to use all my cards about once every 6 months just to keep them active.

 

So you can go from 0 to 750 in 4 years without any help.

Hello There!

 

How % you used from this credit cards in this past 3 years? Was always 10%, more then 30%, what you did?

[Fr8dog 312]

7 hours ago, Bernardo Machado said:

Hello There!

 

How % you used from this credit cards in this past 3 years? Was always 10%, more then 30%, what you did?

I always try to keep the total amount down to a minimum. When I only had one card it would occasionally be above 30% by the time the figures were reported to the credit bureaus. But most times it was below 30%. Since getting more cards (with higher limits) it is usually between 0 and 15%. Those times it did go above 30% I would only see a hit of 5 to 6 points. The score would than bounce back to the previous score the next month.

The biggest hit I got was when I got the car loan and the finance officer at the dealer ran 6 applications against my wishes. It showed up as 6 hard inquiries even though it is not supposed to do that). The loan balance had a big impact of course. I took about a 30 point hit but is bounced back in about 4 months.

[JulienR 92]

When we moved we were able to get unsecured credit cards for $1000 and $1500 respectively with Bank of America. We wanted to get a car loan to boost our credit score since we had the intention of buying a house in the near future. We only wanted a small loan of a few $1000 to avoid paying to much interest since we had the money saved to pay for the car. That did not go through. Doing some research I came across this company called Self (https://www.self.inc/). They open an installment loan for you for a small  amount ($500 to $1600) and put that money in a CD. You then pay off the loan monthly starting at $25 and they report it to all 3 credit bureaus. The loan is for 12 to 24 months, at the end you get the money from the CD and it costs between $90 ad $150 overall depending on the option you choose. After 12 months my score hit 750. In the meantime I have been using my credit card responsibly, keeping it under 20% usage and paying it off. I have been able to increase the limit to $2000 after 6 months and $4000 after 12 months. I have no personal interest in advertising that company but it seems to be a good option if you can't get a car loan or don't want to. Their interest rate is much higher than a car loan, but since you car "borrow" as little as $500 over 2 years, the final cost is much lower.

[Ed&Midori1031 330]

Pay off your credit card at the end of each month.  Make payments on time.  If you cant pay off yourcredit card, dont allow the balance to maintain above 30% of the credit limit on that card.  

[ax1990 29]

Do not borrow or take a loan just to build your credit. Credit score will improve over time anyway as long as you are disciplined.

[SimonBelgium 49]

38 minutes ago, ax1990 said:

Do not borrow or take a loan just to build your credit. Credit score will improve over time anyway as long as you are disciplined.

Yes and no. Without any loans or credit cards, your credit will NOT improve, and your ability to get a mortgage or car loan will be impacted greatly. That said, common sense and good judgement are key when it comes to financial decisions, therefore, signing up for a loan or line of credit should be done wisely, not just picking the first available or signing up for anything you can.

[TMMT 2]

On 11/8/2019 at 9:47 AM, jeanieCZ said:

My fiancee recently informed at her bank (Chase): the bank allows her to get me a credit card (authorised user) without SSN. They told her they will report my credit score to the credit bureaus based on my name and address, not SSN. I certainly hope that is true. Does anybody have similar experience with Chase?

 

Another question: When I become authorised user, does it make sense for me to get my own credit card as soon as possible? I did some reseach online and would probably go with Discover Secured. Or should I just use the CC I got through my fiancee, wait till my score is decent (how long??) and then get myself an unsecured CC?

@jeanieCZ when your fiancée added you to their card as an authorized user, did they use your last name prior to marriage or the one you were going to change to (or are now currently using) as the card holder name.

example: your name before marriage was Jane Doe but their last name was Smith, did they put "Jane Doe" or "Jane Smith"? 
I am trying to do the same for my fiancée in Canada.

Or rather, does anyone have insight into this... so we can, at a later date, connect the invisible credit to now "visible" credit once she gets an SSN and all that.
I don't want to put her "maiden" last name only to have it not count, if that makes sense.

[top_secret 2,376]

On 12/31/2022 at 4:19 AM, TMMT said:

@jeanieCZ when your fiancée added you to their card as an authorized user, did they use your last name prior to marriage or the one you were going to change to (or are now currently using) as the card holder name.

example: your name before marriage was Jane Doe but their last name was Smith, did they put "Jane Doe" or "Jane Smith"? 
I am trying to do the same for my fiancée in Canada.

Or rather, does anyone have insight into this... so we can, at a later date, connect the invisible credit to now "visible" credit once she gets an SSN and all that.
I don't want to put her "maiden" last name only to have it not count, if that makes sense.

 

You should just use whatever the legal name is at the time an authorized user is added.  Then if that name changes at a later date as the result of marriage, notify the credit card company and they will issue new cards and also update the credit reporting agencies.   Thier credit report will list the new name and also the maiden name as an AKA.  My wife made a last name change prior to arriving in the US or recieving her social security number and both names are accuratly reflected in her credit reports based on her being an authoriized user on my accounts.