Credit history: when does it start. Joint car loan for a spouse with no income

[galephys 12]

My husband hopefully is moving this Summer, and we want to buy him a car rather soon,within a month, if not as soon as he gets his SSN: we have no public transportation where I live and he has an unpaid internship(leading to a real job in a few months) lined up, but our work schedules will overlap and sharing a car is not an option. I want to use my good credit to establish his credit by buying a car together, but it looks problematic and confusing right now:

I added my husband as an authorized user on my credit card, but I was told they are not reporting this to CRAs until I give them his SSN. 2 clerks told me 2 different things:

a) his credit history will begin from the day I added him, regardless of when I provided SSN, i.e. they will report to CRA after he moves that he has been a cardholder for a while.

b) his credit history begins from the day I provide SSN, even though he was an authorized user long before that.

Who is right?

I want to make him a co-signer or a co-applicant on the car loan, but he has no proof of income and no reported credit history (or does he?). My bank mentioned they can write his name on the loan, but make a note he has no income... is it any useful for building a credit history?

He may have occasional jobs for cash right away, but again there are no contracts, checks, pay stubs - nothing.How do we prove this income?

Thanks

[rutabaga 209]

Generally, when you add him as an authorized user to your card, his credit report will show a more or less verbatim copy of that particular card's history (so the card open date will be the day you opened the card and not when he got a card as an authorized user, but it will be marked as him being an authorized user and not an owner of the account on his credit report). His actual credit report, however, probably won't be generated at all until he gets a SSN and a credit score will be generated after about six months after his credit file is generated.

The loan will be good for his history if you set him up as joint responsibility* since it will show as such on his report. The notation that he has no income would probably just be an internal bank note and would not show up on his report (although there is a note field for each account on the credit report so it might also show up there as well). Again, it would be best he already has an SSN at this point as that would ensure the loan makes it to his report.

*So there's pretty much three statuses when it comes to how accounts report on the credit report: individual responsibility, joint responsibility and authorized user where each previous one is better on a bank review for future loans than the latter one (so individual > joint > authorized).

Edited May 14, 2016 by rutabaga

[galephys 12]

Generally, when you add him as an authorized user to your card, his credit report will show a more or less verbatim copy of that particular card's history (so the card open date will be the day you opened the card and not when he got a card as an authorized user, but it will be marked as him being an authorized user and not an owner of the account on his credit report). His actual credit report, however, probably won't be generated at all until he gets a SSN and a credit score will be generated after about six months after his credit file is generated.

The loan will be good for his history if you set him up as joint responsibility* since it will show as such on his report. The notation that he has no income would probably just be an internal bank note and would not show up on his report (although there is a note field for each account on the credit report so it might also show up there as well). Again, it would be best he already has an SSN at this point as that would ensure the loan makes it to his report.

*So there's pretty much three statuses when it comes to how accounts report on the credit report: individual responsibility, joint responsibility and authorized user where each previous one is better on a bank review for future loans than the latter one (so individual > joint > authorized).

Makes sense. We were planning on getting SSN first, then a car loan, of course.

thanks!

[N and J 88]

My mom put me on her credit card a few years ago as an authorized user and it boosted my credit. If you are looking to build credit for him get a secured credit card. Credit agencies have no idea it's secured. I did it in sept of 2013 and I now have a 700 credit score. Good luck!

[rutabaga 209]

My mom put me on her credit card a few years ago as an authorized user and it boosted my credit. If you are looking to build credit for him get a secured credit card. Credit agencies have no idea it's secured. I did it in sept of 2013 and I now have a 700 credit score. Good luck!

That depends on how the bank reports it, some report as secured (I've heard Bank of America does, for example), others don't. Either way, it's beneficial. However, some banks are in fact willing to issue a card to someone without much of a credit history--my very first card came from Capital One and it was a regular (i.e., not secured) credit card. I'd go for a plain platinum card in that case as the cards with rewards usually require a good credit rating (but a platinum can be converted to a rewards card later on).

Edited May 14, 2016 by rutabaga

[N and J 88]

That depends on how the bank reports it, some report as secured (I've heard Bank of America does, for example), others don't. Either way, it's beneficial. However, some banks are in fact willing to issue a card to someone without much of a credit history--my very first card came from Capital One and it was a regular (i.e., not secured) credit card. I'd go for a plain platinum card in that case as the cards with rewards usually require a good credit rating (but a platinum can be converted to a rewards card later on).

Hmm. I did not know that. When I took out the credit card most of the ones like Discover, Merrick, and a few other big name ones said that they don't report it as secured. Capital One is a great starter card. Capital One you also get a credit increase after 5 or 6 months of on time payments. =)

[watdog 8]

After the housing bust they stopped allowing people to gain credit from being an authorized user. Call any of the 3 credit agencies and they will tell you that. Basically, it's the same as lying about your credit since you didn't build it and you are not financially responsible for the debt as an authorized user. As mentioned earlier it has to be joint responsibility.

We did a secured card from Wells $500, remember you don't want to carry a balance and try to use less then 10%. Anything above 10% dings the credit score. Don't pay it off right away either, only pay it off when the statement has cycled. After 6 months they automatically refunded the secured money ($500) to her and raised the limit to $1000. After 1 year got a cash back card and don't really use the wells anymore.

To answer the original post, you can get the SS number like day one. We did it before we even got married on the K-1. Went to the bank and opened the accounts. As for authorized user....you will need to get a new account with him as joint responsibility. It was easier for use to just leave mine alone and start new Credit cards for my wife. She's already at 757 Experian and 768 TransUnion. Only 2 credit cards, no auto's, no mortgage. Just have to know how to do it.

[rutabaga 209]

After the housing bust they stopped allowing people to gain credit from being an authorized user. Call any of the 3 credit agencies and they will tell you that. Basically, it's the same as lying about your credit since you didn't build it and you are not financially responsible for the debt as an authorized user. As mentioned earlier it has to be joint responsibility.

All of the major scoring models take AU accounts into account when calculating the score, the accounts themselves are marked as AU though and upon review anyone looking at your report can tell they're AU accounts so yeah, you'd be unlikely to get credit extended to you based on those alone and should have some individual/joint accounts as well, but the AU accounts will calculate into the score.