My Friend Has a 0 For A Credit Score

[Dalmus]

  I promise that this is really a friend, and not me! 

  I have a friend who's car has died, and would like to get a new (to her) car.  She went to her bank (Chase) to inquire about a car loan, but was told that her score was a "0."  Yes, she's 30 years old and has NO credit history.  They suggested that she get a secured credit card to build a history, and when she asked if Chase had one, they said yes, but it requires a 520 minimum credit score!

 So, being the helpful guy I am and remembering some of what I read here, I suggested she go to a credit union, open up a savings account and then do a share secured loan to build a credit score as an altervative that wouldn't necessarily lock up $500 for a year or two like a secured card would.  She would have an instant credit score after the first reporting period.

 My question is, if she does this, how long would she need to carry the loan (even if she goes the route of paying off 90% of it and then taking 3-4 years to pay off the rest) before she'll be in a position to get a car loan and a somewhat reasonable rate?

 She can probably get away with mooching off her parents' spare car for a little while, but she really wants her own vehicle.  So we're looking for a way to get her to qualify for "something" sooner rather than later, but not if she has to pay 26% interest or something crazy like that!

 Thanks!

[Raziel77]

6 months after the secured loan and the zero will become a +ve number. To get a car loan with minimum interest rate, then a mix of bank credit cards, store credit card in addition to the secured loan is desired. The time frame could be one year from the secured loan date.

[bed]

You could also make her an authorized user on one of your cards and not give her the AU card. This would give her that credit history, which would be helpful, assuming the account is in good standing and not maxed out.

[Dalmus]

---

@bed wrote:

You could also make her an authorized user on one of your cards and not give her the AU card. This would give her that credit history, which would be helpful, assuming the account is in good standing and not maxed out.

---

 Since its not a family member or my significant other, I'm hesitant to add her as an AU....  Not that I don't trust her, but does an AU have any rights as far as calling in to the CC company and asking for a replacement card or changing any account information?  Once a car loan is secured, I could remove her?

 You made me think about adding her as an AU to a store card, such as Fashion Bug, where the store no longer exists...  But when I look at the process (at least for Comenity), it doesn't ask for a SSN of the authorized buyer, so I don't think that would help her...

[bed]

I don't know if any credit card company would allow her to request a new card or not. If she were to request a new card, it would be addressed to you. If you add her as an AU, just make sure you don't give her the card or any info about the account, and she won't have enough info to fake her way through account security to do any damage anyway. I would just do this long enough for it to report activity on her to the bureaus, then have her get a secured card. She gets approved, and you remove her from your account, and then she can let her secured card age long enough to qualify for an auto loan. Maybe you'll even feel comfortable with keeping her as an AU at that point.

But if you don't feel comfortable with it, don't do it.

[Anonymous]

Instead of yourself, she may be able to get added as an AU from her parents cards.?. They wouldn't have to let her use it, but as long as they keep utilization low on the cards it would help her build a decent credit score.
A few months down the road she may be in a better position to get her own car and could maybe get her own cards then, too. (3 would be optimal)
At that point she could be removed as AU from the other cards and nurture her credit from there

[Anonymous]

You don't need a social to report the card, that is how comenity is able to do the SCT there is vast databases of info that the banks access to verify info, so if you added her it would likely report. 

[Dalmus]

 So I've decided to leave my advice level at the shared secure loan.

 I was sharing the information about  making her an AU on a card with her sister (a closer friend) and her reaction was "No way in hell!"  They otherwise get along, so I assume the sister knows something about her past financial decisions that I don't.

 Thanks for the suggestions, though!

[Anonymous]

Why did you gave your authentication if it was really you?

[MauiMan85297]

Adding her as an AU would help her credit and no SSN is needed, you could also ask that no card is sent at all but will still reap the benefits when you use and PIF each month.  An AU has no access to your account, can't make changes, can't order a card and cannot even talk to a CS rep about the account unless you gave the CC company permission to speak with them.