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12-20-2012 09:58 AM
Earlier this year I married a US citizen and just a few weeks ago received my permanent residency. Having moved to the US I have no US credit history. In October I appeared on the US credit reporting agencies records (I downloaded my free annual report from experian). So far this is what I have tried:
The credit report lists two credit inquiries by a local credit union where my wife and I opened joint accounts (the first time the report said my SSN was not valid, a few days later we provided additional documents and they did another pull).
1) Work colleagues suggested opening a store card. Tried that and was rejected - not enough open accounts with positive record
2) I had been banking with Chase for 14 months with my pay going in to a checking account. I though I have a good savings record (over $2k per month) and they can see my pay going in, so I applied for a card. Rejected - insufficient credit history.
3) Did some investigation on starting a credit history. Found references to secured cards. Applied for a secured card with US bank because they have branchers both near home and near work. That was a week ago and still waiting for a response or a withdrawal for the security funding.
4) More reading realised a second card could be useful so visited a local small bank and after discussion with them opened accounts with them and applied for a secured card (banking with them imporves chances of approval). If approved in a few days they will take funding out of my account.
I would like to establish a good credit score so that we can buy a house together in the not too distant future. What additional steps can I take. I am conscious that I will now have a number of inquiries on my record, so need to consider steps carefully.
12-20-2012 11:09 AM
Welcome to the forum!
Assuming that you were indeed approved for the secured cards, the next step is receiving the secured cards and using them well for at least 5 months before making any moves. By using them well, I mean treat them like prepaid cards and pay off your balance before the statement cuts, and never go above the limit. After 5-6 months, you'll open a lot of doors!
12-20-2012 12:02 PM
+1 You are doing the right thing. It will take a bit of time, but the secured card route is the way to go. Also if your spouse has a CC, they can add you as an AU. Good Luck!
12-22-2012 06:51 AM
You are doing great!
You are doing most of this already but I'll tell you what you need to do to establish a good credit score here:
You eventually need a minimum of 3 credit cards to maximize your scores. As you have found out, nobody will give you that first card!
You need to get 2 secured cards from banks or nationwide lenders. Some of the better secured cards are from Bank of America, Capital One, Digital Federal Credit Union (DCU) or your local bank is okay too. Use these cards gently every month and make sure to make your payments a few days early. Let 1 of the cards report a small balance every month ($20) and pay the other one down to zero. You should switch which card reports the balance every few months.
It may take as long as 6 months for the CRAs to be able to generate your credit score. If you have made all your payments on time your first scores should be in the high 600s. After the close of 6 statements from these 2 cards it will be time to add 2 more cards. Be VERY careful as to who you apply for credit with at this time. Most lenders will automatically reject you because of lack of history. I would suggest applying for a Capital One Classic Platinum card and a Walmart card at this point.
Most prime lenders won't grant you credit until you have 1 year of history managing multiple cards. Once your secured bank cards are 1 year old, apply for 2 more cards, 1 card each from the following prime banks and be careful to apply for their entry level cards:
Bank of America
That's it! Once you have 2 cards from any of the prime banks you will be set. The prime bank credit lines will grow with you for life. A credit card from a prime bank can easily reach $5K after a couple of years and grow to be as high as $25000 over time.
12-31-2012 02:24 PM
I ran some scenarios through the FICO score simulator on the myfico site. This seems to show that if I open any additional accounts it will take 1 year before my score recovers. This seems to be due to my short credit history. The longer the credit history I told the simulator I had, the more quickly my score recovered from new credit. Note this did not appear to be a simple AAoA effect as I tried many CC with a short history so adding a single CC should not shift the AAoA much, but in each case it took a full year for my credit score to recover. As another scenario I tried assuming a I had a single old CC and added many new CC which should kill AAoA, but the credit score recovered quickly.
Is this a quirk of the simulator, or is it actually the case that with a short history adding a new card will have more effect than a simple AAoA would imply?