Establish Credit History: Best method for a newbie to U.S.?

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Houston101
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Establish Credit History: Best method for a newbie to U.S.?

Post by Houston101 » Fri Feb 04, 2011 3:55 pm

My wife just moved to the US and I was wondering what is the best way to establish credit history for her?

She has a social security number etc.

I had heard something about a prepaid credit card, where it is actually more like a prepaid debit card but the issuing co. reports it as credit card.

Please advise about any other good options.

Default User BR
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Re: Establish Credit History: Best method for a newbie to U.

Post by Default User BR » Fri Feb 04, 2011 4:36 pm

Houston101 wrote:My wife just moved to the US and I was wondering what is the best way to establish credit history for her?.
Do you have credit cards? If so, then have her placed on as a user. They've tightened up that sort of thing, but I would assume that married people on the same card should still benefit.



Brian

UnLearnYourself
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Post by UnLearnYourself » Fri Feb 04, 2011 4:49 pm

Here's what I sent to a friend who had been denied a credit card and was seeking advice on how to establish credit...

1. Open a secured credit card at a local bank. Essentially you give the band the cash for whatever limit you want. So if you want a $500 credit card, you give them $500, and they put it in an account. Then you use the credit card, and essentially you're borrowing your own money. On one hand it sucks because you pay interest on your own cash (only if you carry balances for over 30 days at a time), but on the other hand it appears on your credit report like a credit card, and so long as you don't miss payments you will build positive credit. You can do this on a $250 limit, or a $1,000, or however much cash you'd like to work with.

2. Apply for a Line of Credit Overdraft Protection with your bank, and hook it up to your checking account. This is basically a loan that you only use when you overdraft your checking account. So say you have $10 in your account and spend $10 at the store. Rather than your account going to -$10 and you being slapped with an overdraft fee, they will just take the $10 out of your line of credit. So your checking balance would then be $0, but you would owe $10 on the line. If you never overdraft, or if you do from time to time then immediately pay it off when you next get paid, then this will just sit there virtually unused building positive credit for yourself.

3. Google "Optoutprescreen", and submit your name. What this does is make it so credit card companies cannot access your info and "pre approve" you for cards. This might sound counterintuitive to you since you're trying to get a card right now, but it does a few things. One, it boosts your credit score slightly because credit companies view you as less of a risk if you don't have credit card companies knocking at your door all the time. And two, you get less junk mail, and are less vulnerable to identity theft and things through the mail.

Follow those 3 steps and you will be on your way to establishing good credit, and probably after having the secured card and line of credit for 6 months you will be able to qualify for a decent credit card.

Just keep in mind, if you carry more than a 50% balance (30% to be safe) on your credit cards once you get them, you will have points deducted. Trust me when I say this, PAY OFF YOUR CARD EVERY MONTH!! Don't get into the trap of carrying a balance or it will follow you FAR FAR longer than you ever think"

mmmodem
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Post by mmmodem » Fri Feb 04, 2011 5:11 pm

The easiest way I can think of that doesn't cost you any money is to put her name on the utility bills like water, electricity and cable.

Get a checking AND a savings account.

In a year or two you will start receiving crazy CC offers. Capitol One was the easiest one to get for my aunts and uncles. They had crazy 30% APR and had ridiculously low $250 limits. I had to carefully read all the fine print that there were no annual fees then signed them up. I had them use it for getting gas only. With such a low limit they were able to pay it off in full every month. In 3-4 years, they started getting offers for more reasonable CC rates. I didn't bother signing up online because they were always denied. The prescreen offers worked better because, obviously, they were prescreened. Not always approved but most of the time it worked.

I never cosigned anything with them because I didn't want any risk. I didn't get a secured card either because it required a deposit they didn't have and my way worked the same without the deposit. This is how I did it for my aunts and uncles when they emigrated 10 years ago. Now they all have access to credit. I was so proud when they were finally able to open a cell phone line in their own names and my sisters and I no longer had to have them on our family plans.

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SSSS
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Post by SSSS » Fri Feb 04, 2011 7:39 pm

Get a secured credit card (i.e. put $1000 in a savings account to get a $1000 credit limit) and just use it. It'll get reported on the credit history, and after a year or so they'll probably convert it to non-secured and raise the limit.

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jpsfranks
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Post by jpsfranks » Fri Feb 04, 2011 7:42 pm

mmmodem wrote:The easiest way I can think of that doesn't cost you any money is to put her name on the utility bills like water, electricity and cable.

Get a checking AND a savings account.
Perhaps I am mistaken but I don't believe doing any of the above will affect your credit.

After graduating with a blank history I was rejected for the cards that I applied for. I ended up getting a secured card with BOA. They unsecured it after a year, but at that point I was able to apply for better cards so cancelled anyway to avoid the annual fee.

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SSSS
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Post by SSSS » Fri Feb 04, 2011 7:47 pm

jpsfranks wrote:After graduating with a blank history I was rejected for the cards that I applied for. I ended up getting a secured card with BOA. They unsecured it after a year, but at that point I was able to apply for better cards so cancelled anyway to avoid the annual fee.
Same here, exactly the same, except I kept my BofA card & they eventually converted it to some Ultra Reward Silver Platinum Double Advantage thing.

I'm sure it varies, but none of my utilities or banks ever reported anything on my credit file. Some of the utilities offer letters of credit showing payment history, but that's not something that actually goes on the credit file. It might work as an alternative in some cases.

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Post by livesoft » Fri Feb 04, 2011 7:53 pm

jpsfranks wrote:
mmmodem wrote:The easiest way I can think of that doesn't cost you any money is to put her name on the utility bills like water, electricity and cable.

Get a checking AND a savings account.
Perhaps I am mistaken but I don't believe doing any of the above will affect your credit.
Correct, but the point was not that these things affected credit. Instead the point was that these things affected credit card offers received in the mail.

I bought a TV with store credit when I was a student without a job. That led to credit card offers and things snowballed from there.
Wiki This signature message sponsored by sscritic: Learn to fish.

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jpsfranks
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Post by jpsfranks » Fri Feb 04, 2011 11:30 pm

livesoft wrote:
jpsfranks wrote:
mmmodem wrote:The easiest way I can think of that doesn't cost you any money is to put her name on the utility bills like water, electricity and cable.

Get a checking AND a savings account.
Perhaps I am mistaken but I don't believe doing any of the above will affect your credit.
Correct, but the point was not that these things affected credit. Instead the point was that these things affected credit card offers received in the mail.

I bought a TV with store credit when I was a student without a job. That led to credit card offers and things snowballed from there.
I recall getting rejected by an offer I got in the mail when I had no credit.

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PaddyMac
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Post by PaddyMac » Sat Feb 05, 2011 12:44 am

When I moved from the UK to the US I had no trouble getting a credit card. Have you tried a normal card? I think I also opened a couple of joint cards with my spouse but put my name first. Then I opened one in my name only.

If your wife has ever had a UK credit card, you might talk with the rep and give them the VISA number - maybe they can look it up.

If you do have to have any dealings with immigration, then do put your wife's name on all the bills. They like to see those details.

DaveS
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Post by DaveS » Sat Feb 05, 2011 6:05 am

Before you get a secured credit card, make sure it reports to the credit bureaus. Not all do. Basically anything that reports will get you a decent score in a year assuming no negatives.

Then think of the possibilities. You can get a bigger house than you need, spend more money than you have on a car. The possibilities are endless. Dave

555
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Post by 555 » Sat Feb 05, 2011 6:18 am

I got a "signature loan" for $5k from a credit union that I was depositting my paychecks into. At that time I was an "alien" with no credit history. 2 years later I got a mortgage.

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Houston101
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Post by Houston101 » Mon Feb 07, 2011 10:07 am

I have already added her name to my credit card. Will her name also be reported to the credit bureaus?

For all the secured credit cards you have to pay a annual fee of $18 - $30. I don't want to pay fees for establishing credit!

mptfan
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Post by mptfan » Mon Feb 07, 2011 10:10 am

UnLearnYourself wrote: 3. Google "Optoutprescreen", and submit your name. What this does is make it so credit card companies cannot access your info and "pre approve" you for cards. This might sound counterintuitive to you since you're trying to get a card right now, but it does a few things. One, it boosts your credit score slightly because credit companies view you as less of a risk if you don't have credit card companies knocking at your door all the time.
Really? I have never heard this before. And how do credit card companies know that other credit card companies are "knocking on your door all the time?" I thought that if a credit card company checked your credit report to decide whether to offer you credit, that this was called a "soft pull" and it did not affect your credit score?

arthurb999
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Post by arthurb999 » Mon Feb 07, 2011 10:22 am

If your married, why does she need good credit?

Default User BR
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Post by Default User BR » Mon Feb 07, 2011 10:48 am

arthurb999 wrote:If your married, why does she need good credit?
If they apply for any loan jointly.



Brian

arthurb999
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Post by arthurb999 » Mon Feb 07, 2011 11:10 am

Default User BR wrote:
arthurb999 wrote:If your married, why does she need good credit?
If they apply for any loan jointly.



Brian
Assuming he makes more money than she does... don't they use the primary borrower's (highest wage earner) credit score.

windscorpion
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Post by windscorpion » Mon Feb 07, 2011 11:31 am

A secured loan from credit union worked for my friend, no fees at all.

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