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Mortgages & Credit Score

Mortgages & Credit Score

Old Apr 7th 2012, 1:42 pm
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Talking Mortgages & Credit Score

Hi guys. I'm a Brit, living in the UK, married to an American who has been living in the UK for 7 years.

We are thinking of heading to Denver (summer 2013) and are in the process of applying for my Green Card.

We will need a mortgage of around $300k based on the houses we have investigated thus far but without a credit history I am not eligible for a loan. Equally, my wife's score is producing 'zero' because we've not used her accounts in the States for much activity.

Any ideas how I can start the path to good credit whilst still in the UK? Any idea how long it will take to get a good credit score? Can I actually GET a good score whilst having a UK address.

Any help would be appreciated.

Mark.
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Old Apr 7th 2012, 1:53 pm
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Default Re: Mortgages & Credit Score

Hi Mark,

Welcome!

You will have a gazillion questions about your move, of course!

Take a look here at our guidance/help page for starters -> http://britishexpats.com/forum/showthread.php?t=753211

This will help you with the standard questions, but may not help with some specific issues peculiar to your situation.

That is the time to come back to the forum with those specific questions.

You will find some members were able to bring their UK credit with them by having a UK Amex Card for at least 12 months before moving, plus it is possible for some lenders to take the trouble to conference call with you and a UK credit reference agency if I recall correctly.

Good luck,

Cheers

Harry
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Old Apr 7th 2012, 3:54 pm
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Default Re: Mortgages & Credit Score

Originally Posted by Mark Ridley View Post

Any ideas how I can start the path to good credit whilst still in the UK? Any idea how long it will take to get a good credit score? Can I actually GET a good score whilst having a UK address.

Any help would be appreciated.

Mark.

Good question. I'm no expert but i'm guessing one of the first things to do would be to open an american bank account, one for each of you. Might be worthwhile going with a credit union over a bank. If you can get as far as opening a checking and savings account they should have no problem giving you a small credit card or line of credit.

The biggest issue I would see is if there might be some exceptionally daft anti-terrorism law requiring you to show up in person 'to prove you're not osama bin laden'.


Assuming you get that far you should have no problem using and managing your credit line/card from the uk.
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Old Apr 7th 2012, 5:42 pm
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Default Re: Mortgages & Credit Score

Originally Posted by Mark Ridley View Post
Any idea how long it will take to get a good credit score?
I was actually surprised how quickly after arriving I had a reasonable credit score. Unfortunately that is only part of the problem and the smaller part as well. Much more important is credit history and the length of time that lenders can see your previous credit history going back. I would say I had been in the US about 3 years before I with reasonable certainty knew that when I applied for credit for some reason there wouldn't be a problem.

But I have never applied for something as large as a mortgage. Even with a good score, you can expect to be required to put down a hefty deposit and the interest rate be a good bit above the best rates if you have a short credit history.

I am wondering why your wife is having problems with her credit. My wife lived in the UK for 10 years before we moved back, and we got a mortgage based on her US credit history. All she had kept active here was her US bank account.
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Old Apr 8th 2012, 9:03 am
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Default Re: Mortgages & Credit Score

Thanks guys. My wife's US account is fairly inactive so I guess the first thing to do is use it more for UK purchases PLUS to make it a joint account by adding me. I'll keep checking on this site - seems like a great place - as I'm sure I'll have 2,000 other dull and dumb questions. Happy Easter. Mark
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Old Apr 9th 2012, 6:01 am
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Default Re: Mortgages & Credit Score

Make sure you are set as a joint owner of the account and not just an authorised user, otherwise it won't count.

Happy Easter too!
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Old Apr 9th 2012, 6:29 am
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Default Re: Mortgages & Credit Score

Thanks HTS. Do you know if Credit Scores are linked to a US address, to the actual account activity itself? By using the debit card in the UK and funding that account from the uk I'll be punished on the FX in both directions. Happy to take those hits providing the credit score picks up activity in the account for at least my wife. Cheerio. Mark.
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Old Apr 9th 2012, 11:08 am
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Default Re: Mortgages & Credit Score

Originally Posted by Mark Ridley View Post
Thanks HTS. Do you know if Credit Scores are linked to a US address, to the actual account activity itself? By using the debit card in the UK and funding that account from the uk I'll be punished on the FX in both directions. Happy to take those hits providing the credit score picks up activity in the account for at least my wife. Cheerio. Mark.
I'm not sure that a credit score is impacted by 'normal' checking account usage at all. I might be wrong though.
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Old Apr 9th 2012, 11:59 am
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Default Re: Mortgages & Credit Score

Actually had a look at my credit score last week - I've been in the US for around 18 months - and the only things I fell down on were:
- All my reports were less than 3 years old
- I don't have a mortgage (or any record of paying off a mortgage)

As far as I can tell, the report is principally linked to your SSN. It can be awkward for the first 3-6 months if you have no credit history in the US to start with, though it doesn't sound like that will affect your wife. Also, unsure if using a debit card will have much effect as typically the credit agencies are looking to see if you are regularly paying off bills which make credit cards better. Others may know better than me.
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Old Apr 9th 2012, 12:04 pm
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Default Re: Mortgages & Credit Score

Thanks guys. I'm an ex-Wells Fargo employee, in London, do wi see if I can find out if they have a banking unit in the States to cater for us foreigners. My plan is also to call their mortgage hotline and see if the whole credit score is linked to SSN.

On the one hand my wife could use her US credit card which could enhance her score, but in moving to the States she is likely not going to be working and so while she has the great 'score' I'll have the means to repay any loan. Chicken and egg!

In any case, if you are interested i'll post my findings here.

Cheerio
Mark
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Old Apr 9th 2012, 12:15 pm
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Default Re: Mortgages & Credit Score

Originally Posted by Mark Ridley View Post
if the whole credit score is linked to SSN.

On the one hand my wife could use her US credit card which could enhance her score,
Yes, credit score is linked to SSN.

When you get your SSN your wife can add you as an authorised user and this will report on your credit report.

Other then that, Amex is the way to go.
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Old Apr 9th 2012, 1:55 pm
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Default Re: Mortgages & Credit Score

Originally Posted by tonrob View Post
I'm not sure that a credit score is impacted by 'normal' checking account usage at all. I might be wrong though.
It isn't. Unless you end up over drawn, then after x number of days the bank will report you negatively to the credit trio. Being a good customer does nothing, for anything but credit products.

Best advice to kick start things is having a AmEx card with history and good standing, that's it.
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Old Apr 9th 2012, 4:50 pm
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Default Re: Mortgages & Credit Score

We've been in the States for about 18m now and are just about to complete on a house purchase. We followed the standard path of getting a secured CC early on arrival, and after about 1 year of using that gently, we applied for a couple more cards with no issues.
We came over with a USD Amex card which is great for making purchases, but doesn't help our credit rating at all. You need to get a Amex card issued directly from Amex ASAP and start building history, and then hopefully transfer it across.

Our credit score isn't great though, we struggled to get it into the low 700s due to the lack of history. I also found that any current balances would hurt the figure, even though we pay them off in full each month.

Our mortgage approval was a little painful too as they wanted to validate our credit history in the UK. We had to let them ring all our UK CC companies and get them to detail our account status and history over the phone (with us asking the questions).
Also, they have demanded 2 years IRS tax returns to get approval. We've just submitted #2, so hopefully final underwriting will now be good.

All the best!
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Old Apr 11th 2012, 7:24 am
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Default Re: Mortgages & Credit Score

Originally Posted by Mark Ridley View Post
Hi guys. I'm a Brit, living in the UK, married to an American who has been living in the UK for 7 years.

We are thinking of heading to Denver (summer 2013) and are in the process of applying for my Green Card.

We will need a mortgage of around $300k based on the houses we have investigated thus far but without a credit history I am not eligible for a loan. Equally, my wife's score is producing 'zero' because we've not used her accounts in the States for much activity.

Any ideas how I can start the path to good credit whilst still in the UK? Any idea how long it will take to get a good credit score? Can I actually GET a good score whilst having a UK address.

Any help would be appreciated.

Mark.
Why can't you not apply an international mortgage from the UK using your overseas income? That should be easier then you building up your US credit score
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Old Apr 11th 2012, 8:52 am
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Default Re: Mortgages & Credit Score

Good question. However, I will have no overseas income because I would have quit and already moved to, say, rented property in the States. I could sell my uk home and use that as a deposit on a house in the States whilst renting here thus showing an ability to repay. However, the home will be classed as either a buy to let or a holiday home and will attract a higher rate of interest which will already be high as it is an overseas property.

I have since found out that Wells Fargo offer a 'secured' credit card. So, you place up to $10,000 with them and they offer a credit card up to that value. However, ironically they will still credit score you to see if you are eligible.
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