Noorah101

Those first ones that got denied, I believe were simply because it was too soon after he got the first one, and nothing was on his credit report yet. I didn't realize at the time that having one card didn't necessarily mean you can't easily get another one. The reason for denial came back as "lack of credit history".

That bums me out about the 20% ratio thing! That means he's going to have $400 of his money tied up that he can't really use...it's just sitting there while he only uses $100 of his credit limit each month. ****shaking head**** doesn't make sense to me. If you have the limit, and it's your own stupid money, why not be able to use it?! I know...credit never really makes sense.

It's been 6 months since applying for one and getting denied. We'll try again next month.

Thanks again for all your help!
Rene

fatbrit

It's the balance when the monthly statement is generated.

fatbrit

Look at this way: the $500 tied up for a year is a good investment. If you put it in a money market account for a year instead, it might earn you ten taxable bucks in interest. Instead, that $10 (+ any charges for running the card) has allowed him to build his credit history. Imagine the difference in interest payments, for example, on buying a $15000 car over 5 years with reasonable credit @ 5%, or with no credit @ 18%. It's a small price to pay!


BTW, he will suffer from "insufficient credit history" for 2 to 3 years. Take it slowly!

Noorah101

Ohhhhhh that long? wow. Well, I really appreciate your input on all this, you've been very helpful, thanks very much. We'll take it slow.

Best Wishes,
Rene

1Duckie

Paying the card in full does not build the credit history that the lending companies like to see on the credit report.. what they like to see is that you make payments on time.

It is great that you can pay the full amount off each month but until you establish credit will you not be able to obtain more.

Such is life.

fatbrit

Think there may be an urban myth hidden in here!

Paying in full on a credit card or paying the minimum is irrelevant to your credit score. The important factor is how much you owe on them and what percent of your total credit card limits do your credit card balances represent.

You do not need to pay interest on a credit card to obtain a credit score.
Paying interest is irrelevent!!!

1Duckie

I did not say paying interest on a credit card was required to obtain credit.. I said that showing that you make timely payments is something that creditors look for when they look at your credit score.

Here is another way of obtaining credit.

Make large deposit of about $300 in a savings account then borrow ½ back tell the bank manager what you are trying to accomplish and they will usually help you.
.
Make about 4 payments then pay it off. You would have then established a credit history with the bank and it would show on your credit report as having made timely payments and an early pay off. Next apply for a gas credit card.

Keep in mind that you still can be turned down if you earn less than $9000 a year.

Here is another and last resort that I used to help my little brother establish credit.

I ordered a gas card in my name and put him on the account. He used the card for 1 month (he put $130.00 worth of charges on the card). I told him not to charge anymore but work to pay off the card. He did this in 3 months. I then canceled the card. He called the credit card company and they issued him his own card.

Don't shoot the information down without thinking it through.

fatbrit

Read the sentence, "Paying the card in full does not build the credit history that the lending companies like to see on the credit report" and still wonder if it would suggest to readers that you need to pay interest to improve your credit, I'm afraid. It seems to imply to the reader that not paying the card in full, i.e. paying interest, will make you more credit worthy. That's why I said 'may' as I wasn't sure where you were going.

All your examples listed are great, workable and relevant.

However, I would suggest stretching the loan to 6 months for best results, paying a large amount on the first payment followed by five small payments to minimize interest costs.

dbj1000

At the risk of boring FatBrit (who's seen this many times before), here is my standard Credit History reply:

We came over here on an H1-B visa 16 months ago, and within months had a car loan, mortgage, credit cards and a "very good" credit score. Here's what we did:

As soon as we arrived we joined the Credit Union which is (vaguely) associated with my company. I don't think we're alone in our experience that some Credit Unions can be far more flexible and useful than the large banks when it comes to starting your credit facilities here. If your company doesn't have a relationship with a Credit Union, then find out which bank it does business with. If that fails, find a local Credit Union - their Union status requires that you belong to an organization affilitated with them somehow, but in the case of ours that includes certain sports clubs, gyms, charities and schools as well as five local companies.

With a letter from my company president (just saying who I was and that I would be working for them long-term) we were able to open a bank account and get a $5,000 limit Master Card right there and then. However, it took a lot of personal initiative on the part of the Credit Union employees to work around the fact that I did not have a Social Security Number yet. In the end they entered "random" numbers as a place-holder in the computer system until I had my SSN a month or so later.

We then asked them for a car loan and, after some discussion with their head office, we were given their "good" credit rating interest rate (6.5%, only 0.5% above their best rate at that time). This again was down to initiative and discretion that a big bank wouldn't have been willing or able to do.

Next, after 9 months in the country, we approached them for a mortgage. They told us that they couldn't be flexible enough for us on that, and sent us to a mortgage broker who they all knew. Although he took a small fee from the lending company he was excellent at finding us a great deal (0.2% above the best interest rate we could have found anywhere in TX with any level of credit history) and was great at working around the minor problems caused by our lack of credit history. We didn't have to get international credit reports, letters from our UK bank, or ANY non-standard paperwork for that matter.

Within a couple of months of buying our house the flood of credit card offers started. Turns out our credit score went through a step change at that point. When we bought the house it was around 650 ("fair"), it's now around 750 only 16 months after arriving in the US, which is good engough to get good credit rates from "mainstream" financial services too.

The moral of this story? Don't accept the crappy service that so many financial oranisations here offer (they're as bad in the UK, in my experience). Don't accept ill-informed demands from bank employees - even my Credit Union had to be shown the state law saying that they could not demand a Social Security Number purely as an ID for my wife (who is not entitled to an SSN on her visa), for example. If a bank isn't being helpful about the complications of being a new Expat, take your business elsewhere. We weren't moving huge sums of money over from the UK, but we were still offering our prospective bank some long-term business, and too often the big banks figured they were doing us a favour!

Good luck! Regardless of what many threads and posters here will tell you, starting your new credit history here shouldn't be too difficult, and for us it served to remind us that having combined available credit card limits of over $75,000 in the UK wasn't a good thing, it was just an invitation to get into the debt problems so common over there!

tonrob

Hi!

Am just about to move over (this coming weekend!). Visited recently for a house-hunting trip and was able to open bank accounts and get a mortgage pre-approval without a SSN and no U.S. credit history. (Showed them a copy of my UK Experian credit report and my online banking summary showing my savings balances that I'd be using as a deposit).

Not found a house yet but, all things being well, will do so shortly and go through with the mortgage.

My question is: will obtaining the mortgage 'jump start' my U.S. credit rating in any way? How soon should I expect to be able to get an unsecured credit card? (I'm fully expecting to have to start off with one of those secured jobbies).

Anyone else done the mortgage first, credit card later thing?

inquisitive40

Hi all,
I have read the replies and my first question is on the store card, is Mervyns a REAL easy store to get a card from? As stated before I have tried Sears etc and was refused based on lack of credit history.
Second question here is, if my wife and I both got a joint secured credit card, will her credit history spill onto me OR will only the history of the secured card show? We both need to build up our credit and so this is something we would like to do.
Lastly, I think to Rete, by using so much of the secured card it was showing the credit agencies that you were running close to your limit of credit and so does not help get credit as quickly as the previous method of only using between 20 - 30% of your credit.
A point on applying for cards when one has no credit history, is this actually hurting anything? Due to not being registered with the credit bureaus and so having no history currently, will they back date the history when I do get listed? I presume the impact of denials is that other prospective lenders look at the amount of denials someone has and base their decision on the fact that the applicatant looks "desperate for credit" and so not as good a risk?

Thanks
Patrick

1Duckie

You do not have to register with a credit reporting agency.

If you rent an apartment, the apartment complex usually reports your prompt payments to the credit reporting agency.

Both you and your spouse will have your own credit scores according to your Social Security number.

If you get on a credit card with your Spouse, you are both resposible for that credit card therefore if it is not paid, it will show up on the credit report since when you applied for the card they asked for both Social Security numbers. The only time that the credit history spills on to the spouse on a joint account is when that account has both names each name having provided their social security number.

If your apartment complex is not reporting the prompt payment, you can go to their office and ask them to do so or write the Credit Reporting agency so they will reflect this in your credit report... thus another way to establish credit for a credit card.

inquisitive40

We rent from a private landlord who does not do credit reporting and so that is not an option.

By having my SSN on the secured card and then just having my wife's name on it also, will this still help her credit? Will it damage mine? The only bad points on her credit are lates and a couple of defaulted accounts which were paid off and one which was written off as bad debt, all from her previous marriage and which were he ex's responsibility to pay.
Will any of this spill onto me if she is on a joint secured card?

Patrick

NC Penguin

<<snip>>

They do, do they? Never happened to me. I've checked my credit report each year I've been in the US. The apartment complex owners never appeared on my credit report.

Have you done this personally? Just wondering.




NC Penguin

inquisitive40

We rent from a private landlord who does not do credit reporting and so that is not an option.

By having my SSN on the secured card and then just having my wife's name on it also, will this still help her credit? Will it damage mine? The only bad points on her credit are lates and a couple of defaulted accounts which were paid off and one whic was written off as bad debt, all from her previous marriage and which were he ex's responsibility to pay.
Will any of this spill onto me if she is on a joint secured card?

Patrick