Building credit from nothing, literally.

[zack]

My wife has been trying to build credit here but the doors have been slammed in her face. All of the credit card companies have turned her down. She can't even get a JC Penny card. Everyone gives her the same reason:

"The credit bureaus have no information about your credit history and therefore we are unable to grant you this card."

My question is this: How can she build up any credit if nobody will help her? I was thinking about putting her name on the utilities but they never report good payment histories, at least not in my experience. It would help if she had a job but she can't at the moment because she is too busy studying for her board exams. She is more than willing to work, but we prefer that she devote all of her time to her studies (for now). Any suggestions?

[Pivery]

  Zack,

Although I am not married to my Colombiana yet, in my previous marriage to an AW I added my her name to my Visa credit card and she eventually got credit from there. Or you can apply for a new card and have her as a co-applicant. Also try to have her open a bank account in her name and get a bank card that works the same as a credit card but just draws off her money in her bank account. You can also as a last resort, go to a jewelry store and have her put down half of the total cost for something inexpensive there that she might want and get going from there.

Hope this helps somewhat...

Pivery

[zack]

Pivery,

She already has a bank card. Do the banks report the usage history of such cards to credit bureaus? If they do, great, but I don't understand what that would prove considering that there are no monthly payments involved- just spending one's bank money. But if they report it, good. I'll encourage her to use it. It's a lot better than nothing.

Adding her name to my visa card sounds like a good idea. She has proven to me that she is responsible with money, at least thus far.

Regarding money down on a piece of jewelry- I'm assuming you're talking about seller financing. They usually do credit checks for that, but it is something to consider down the road.

Thanks for your help.

Zack

[Kiltboy1]

Zack

I think you are going to have to get her one of those "SECURED" credit cards where you put the money upfront and then she starts using it and paying her balance off. They will report to the credit agencies and then she can build the credit to get a regular card later.

KB

[Bob_S]

Pivery's right.  Put her on your credit account to start.  If she's sensible and careful with money, you can put her on your big accounts.  If she's not used to dealing with real money, open a new joint account with a lower credit limit.  I put my wife as a co-applicant on our mortgage even though none of her assets back in Japan counted toward our application.  She's on two shared bank accounts and 2 of my 3 main credit cards.  It was a couple of years before my missus started getting her own credit card offers which of course she promptly throws away because she doesn't like debt.  Building good credit is just one of those things that takes time.

[Pivery]

  Zack,

I have a Visa from my bank that is secured. It reports to the credit agencies every month, so that's definitely a good way to start. Also I mentioned jewelry credit. They will check her credit and find none, but this is how most people with no credit at all got started. They will ask you to put around half of the total cost down as collateral. But once she pays this off, she now has some reported credit.

Pivery

[eddomo1970]

Jewelry credit is a good start. That is how i did it back in the 80's. Once you make a few payments then it is off to the races.

[satori]

Now is a difficult time to establish credit as many companies are still tight with credit and looking to reduce exposure in anticiapation of continuing high unemployment and likely defaults.

[sabound]

debit cards do nothing for credit rating , ever . they are a waste to build credit . Secure credit cards are the way to go .

[Calipro]

My wife has been trying to build credit here but the doors have been slammed in her face. All of the credit card companies have turned her down. She can't even get a JC Penny card. Everyone gives her the same reason:

"The credit bureaus have no information about your credit history and therefore we are unable to grant you this card."

My question is this: How can she build up any credit if nobody will help her? I was thinking about putting her name on the utilities but they never report good payment histories, at least not in my experience. It would help if she had a job but she can't at the moment because she is too busy studying for her board exams. She is more than willing to work, but we prefer that she devote all of her time to her studies (for now). Any suggestions?

Putting your wife on credit cards that you have had for years and have large lines of credit will help her get credit fast and a lot of it. Remember to put her name only on cards that you have had for years and that you have a very good payment history with otherwise you can actually damage her credit score.

The slower option is simply to get her some secured credit cards.

[Ray]

As others have mentioned, I also added my wife as a joint owner on bank accounts and got her added to a major credit card account I have.

She has one store card with a major department store. I opened it with my credit as a joint account and the store asked if we wanted the credit history reported to the credit bureau in her name also. You can try that approach with JC Penney, assuming your credit is good.

If you would rather have her establish her own credit independent of yours, have her open a credit union (or bank) savings/checking account. She can talk to a loan officer about establishing her credit history and they should be able to help her out.

My credit union has a plan specifically for those wanting to establish a credit history. You deposit say $1,000 in an account and use that to apply for a secured loan. You are essentially borrowing your own money at a low interest rate. As you make monthly payments on time, your payment history is reported to the major credit bureaus and after 12 monthly on-time payments, you have a nice credit history to get you started. It was designed mostly for young people just starting out but would be ideal in your case for your wife if that's the way you want to go. That way you don’t need to buy a piece of jewelry and the only cost to her is the loan interest which is typically lowest for a secured loan.

Ray

[leather neck]

Zack,

You've gotten some good advice already, I would recommend you combine some of the approaches to achieve your goal.

1) Add your wife as a secondary card holder on one of your established credit cards, this one move will get her credit off of the ground. Once she has had that for a couple of months,

2) apply for one of the major fuel cards, ie., Chevron, Shell, Union 76, etc. I know in the past it was easy to get a fuel card. You have to buy fuel anyway, so use the card with her name on it to make the purchases, set the cash aside you would've used to buy the fuel and pay the bill off each month.

3) The secured credit card is a great way to go, if the payments are on time, eventually the card issuer will offer to convert the card to an unsecured card. Not sure if they still do that since we have this meltdown going on. If there is a credit union in your area, become a member, they are much easier to work with. Deposit 300-500 dollars in a savings account, then ask for a loan not exceeding that amount with you and the wife as primary borrowers, don't spend the cash, make the payments with it.

4) If you have a (and who doesn't?) cell phone, add her to that account as well.

But if you have any issues (I make no assumptions here) with your credit, the secured credit card and fuel card will get her started.

Leatherneck

[zack]

Very good advice everyone. Thanks! My wife thanks you also.