Whats the best way to begin credit history ?
I have very good credit history and my wife has none. She got a job recently and a social secuity number (obviously). I understand that it takes several years to build a credit history. My question is on how to begin it the best way ? My questions are - What is the best way to start / build Credit history ? - Will she have a basic FICO credit score to begin with or does she have to build all the way from 400 ? - I believe payment history makes a good component of the score. I have excellent scores so can I pass on the utility bills to her so that when she pays her credit would build ? - I thought opening a credit card and making timely payments on purchases on that card would definitely help. Is it a good idea to apply for one ? If she does she may be declined for lack of credit history and that will further mar her credit history. What are the best card issuers to apply for one ? Kindly advise, Thanks
Public Comments
- The best way to start may be to open a joint credit account and pay promptly. That should start to build a credit record in her name also.
- Get a joint credit card in both your names and use it for everyday things never exceed 30% of your limit in any given month and pay in full before the due date. Don't worry about utilities, cell phones or gym memberships that type of stuff does not report unless you don't pay them.
- 1) She starts building credit by opening a credit card or two. Start with a store line of credit, or gas card. Apply for a secured credit card, then after 6 months have it changed to an unsecured card. Also, she can apply for personal loans. These all start building a credit history. 2) In the beginning she has NO credit. Once she starts building it, it starts in the mid-600s and will increase as long as she makes timely payments. Note that many lenders will be reluctant to give credit because the new credit she has will not be established long enough to give an opinion about her. Just ask the lenders, show them her employment history and income, and they should be convinced to take a risk and give credit. 3) Payment history is HUGE when it comes to credit scores. Once established, pay on time! 4) There are several banks that specialize in no credit or bad credit...but they will charge you annual fees and a bit higher interest. OK, that answers your questions...now here is what you SHOULD do. Open a credit card in her name, but put yourself as a joint owner. You being on it with your good credit should get the application approved. Consider getting a couple of small personal loans. Example, if you need a new appliance or tv, get it on credit, but pay it off after 6 months. That will establish a good credit line for her and not cost yo a lot. Some places have great "same as cash" terms where if you pay within 6 months, you don't pay any interest. Make sure they report to the credit bureaus, and that will help greatly. In other words, use your good credit history to help prop up your wifes lack of history.
- You could open a joint account but if you want credit just in her name the best way to start would be to apply for card in her name only. If she has no credit she may need to start with a secured card and build from there. Bank of America and Orchard bank both have good secured cards that after 6-12 months of responsible usage can be turned into a regular unsecured card. If she gets turned down for no credit or limited credit this won't hurt her but don't apply for a bunch of cards just pick 2-3 that seem to fit her needs or go for one secured card and after a few months then try for a store card or other sub prime credit card. Then let them age for at least 6 months and she should have an okay score.
- JC Penney's accepts people with no credit history. (At least the last I knew) If they don't accept her she needs to pull up her credit because someone probably has been using her credit. Penney's have sales where you spend so much (150 dollars?) and no interest for 90 days. Have her buy something she could use and make monthly payments for 90 days. Then wait for next sale like that and do it again. It is going to take time. it would be an unsecured card. No reason to pay money if you don't have too. She wouldn't have a score of anything cause they basically don't know what she is going to do with it. Sometimes it is harder to get credit with no credit.
- steps: 1 job 2 debit card 3 credit card 4 A small loan consolidation with low interest is the best I found interesting information about your answer & options here. http://all-debt-consolidation-loan.blogspot.com/2007/07/loan-consolidation.html
