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How to successfully build an American credit rating

How to successfully build an American credit rating

Old Feb 24th 2009, 7:46 pm
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Default How to successfully build an American credit rating

Hi BE, so my Green Card has been approved and should be with me next week. My question now is, how do i build a credit rating here in America? I tried applying for a couple of the lower end credit cards before i received my GC but nothing.. should i try again now? Say a $300 limit, use it, and pay off the full balance... over and over. Is that a speedy/steady way to build credit?

My goal is to have a good enough credit rating so that starting in 2010, if i so wished i can access school loans, car payments, and eventually in a few years a mortgage on a house for my Wife and I.

Any advice? I'm 20 so trying to get my head around the whole thing!

Thanks in advance,

Richard
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Old Feb 24th 2009, 7:51 pm
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Default Re: How to successfully build an American credit rating

Originally Posted by LoveConquorsAll View Post
Hi BE, so my Green Card has been approved and should be with me next week. My question now is, how do i build a credit rating here in America? I tried applying for a couple of the lower end credit cards before i received my GC but nothing.. should i try again now? Say a $300 limit, use it, and pay off the full balance... over and over. Is that a speedy/steady way to build credit?

My goal is to have a good enough credit rating so that starting in 2010, if i so wished i can access school loans, car payments, and eventually in a few years a mortgage on a house for my Wife and I.

Any advice? I'm 20 so trying to get my head around the whole thing!

Thanks in advance,

Richard
There are plenty of threads around here on building credit....try the Wiki too, there might be an article over there.

But very basically, you have ZERO credit right now, so it does no good trying to apply for a credit card.

The best thing you can do right now is get a secured credit card, which means you put up the money for it (let's say $300 as you said). The bank holds your money and gives you a credit card with a $300 limit. After about a year of using this wisely (always make payments on time!), they will give you an unsecured credit card, and that will get the ball rolling.

Once you have the secured credit card, you can try getting a small department store card (think Walmart or Best Buy), or maybe a gas card. Use those wisely, as well, and pretty soon you'll have a credit score.

Rene
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Old Feb 24th 2009, 8:06 pm
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Default Re: How to successfully build an American credit rating

Originally Posted by Noorah101 View Post
There are plenty of threads around here on building credit....try the Wiki too, there might be an article over there.

But very basically, you have ZERO credit right now, so it does no good trying to apply for a credit card.

The best thing you can do right now is get a secured credit card, which means you put up the money for it (let's say $300 as you said). The bank holds your money and gives you a credit card with a $300 limit. After about a year of using this wisely (always make payments on time!), they will give you an unsecured credit card, and that will get the ball rolling.

Once you have the secured credit card, you can try getting a small department store card (think Walmart or Best Buy), or maybe a gas card. Use those wisely, as well, and pretty soon you'll have a credit score.

Rene
Thanks Rene that's great to know, could you tell me a little more about how the secured credit cards work? I researched a few just now, but what i am unsure on is.. say i was to put $300 down and then use my credit card, i would pay it off as if it were payments monthly, where does my original $300 go?
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Old Feb 24th 2009, 8:11 pm
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Default Re: How to successfully build an American credit rating

You're in a perfect position since you married an American. Have her put you as a joint cardholder on any credit or store card she has.
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Old Feb 24th 2009, 8:40 pm
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Default Re: How to successfully build an American credit rating

I ended up getting a Capital One card when I arrived to try and build a credit score though not sure whether it helped my score much as I wound up getting my father-in-law to co-sign a mortgage for me a couple of months after so that's probably made a bigger difference to my score than anything.
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Old Feb 24th 2009, 10:01 pm
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Default Re: How to successfully build an American credit rating

Originally Posted by LoveConquorsAll View Post
Thanks Rene that's great to know, could you tell me a little more about how the secured credit cards work? I researched a few just now, but what i am unsure on is.. say i was to put $300 down and then use my credit card, i would pay it off as if it were payments monthly, where does my original $300 go?
The bank returns it to you when they give you an unsecured card.

Duncan had a good idea, too. I added my husband to a couple of my existing credit cards to help boost his credit when he first got here. It helps that I have good credit, though. If your wife's credit is no good, don't tag along on her bad credit.

Rene
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Old Feb 24th 2009, 10:45 pm
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Default Re: How to successfully build an American credit rating

Originally Posted by LoveConquorsAll View Post
... starting in 2010, if i so wished i can access school loans
You don't need a credit rating to get a school loan. In fact, a FAFSA loan (if you qualify) will, by itself, jump start your credit score. Why? Because it's backed by the US government.

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Old Feb 25th 2009, 12:18 am
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Default Re: How to successfully build an American credit rating

Originally Posted by Duncan Roberts View Post
You're in a perfect position since you married an American. Have her put you as a joint cardholder on any credit or store card she has.
As far as i'm aware her credit is not that great, she has a credit card with chase with a $500 limit. Is it worth it?
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Old Feb 25th 2009, 12:27 am
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Default Re: How to successfully build an American credit rating

Originally Posted by LoveConquorsAll View Post
As far as i'm aware her credit is not that great, she has a credit card with chase with a $500 limit. Is it worth it?
You have no credit. Bad is better than none. Get on the card, use it to the tune of $150-200 a month and pay the balance every month.
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Old Feb 25th 2009, 2:59 am
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Default Re: How to successfully build an American credit rating

My wife put me on her card and we opened a joint bank account, we also now have a nice size mortgage, but we do not have any credit cards, got rid of them 2 years ago.
Took me about a year to build enough credit to get a card on my own that was a Walmart card.
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Old Feb 25th 2009, 8:11 pm
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Default Re: How to successfully build an American credit rating

My wife was able to add me to her American Express card and they gave me my own card etc. I've had a checking account over here for nearly two years but they still won't give me a credit card.

The thing is, I'm not sure if being added to my wife's cards is a long term fix or just a quick fix. It allows me to have a credit card, but is it helping my credit rating?

Some department stores don't care too much about credit rating so that could be a good place to start...
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Old Feb 25th 2009, 8:12 pm
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Default Re: How to successfully build an American credit rating

Oh, also get your name on the household bills and a cell phone plan. If you keep up to date paying these I understand that this will help - that was the advice my bank gave me anyway!
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Old Feb 25th 2009, 8:17 pm
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Default Re: How to successfully build an American credit rating

Originally Posted by squirejames View Post
Oh, also get your name on the household bills and a cell phone plan. If you keep up to date paying these I understand that this will help - that was the advice my bank gave me anyway!
These are more likely to give you bad credit if you don't pay them rather than good credit if you do. To count towards real credit, it needs to be a credit account.
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Old Feb 25th 2009, 8:27 pm
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Default Re: How to successfully build an American credit rating

Originally Posted by squirejames View Post
The thing is, I'm not sure if being added to my wife's cards is a long term fix or just a quick fix. It allows me to have a credit card, but is it helping my credit rating?
Both. You will inherit her payment history, or at least a portion of it, and be on it in the future.
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Old Feb 25th 2009, 8:50 pm
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Default Re: How to successfully build an American credit rating

Originally Posted by squirejames View Post
Oh, also get your name on the household bills and a cell phone plan. If you keep up to date paying these I understand that this will help - that was the advice my bank gave me anyway!
Doesn't help at all....they only ding you for late payments not for being a good customer.

Does help for immigration purposes though if you get here via a marriage route though.

Thing with store cards, they are crap, and you really only want one or two as a max just to help start you out, but if you go that route, apply for them at the same time so your non history only gets one ding rather than multiple dings.
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