10-15-2012 11:12 AM
Hi there, I'm new to the boards and I've searched but can't seem to find an answer to my question. My own home is paid for so I don't have the benefit of on time mortgage payments to help with my credit score. I do however pay the mortgage on my parents home. The loan is in my parents name but I took over their payments for them back in 2007 when my Mom became ill and was no longer able to work.
I make the payment online monthly from my personal checking account. (My name only.) Is there any way that this revolving credit can help ME with MY credit score? I've gone from a 614 FICO score to a 711. Meanwhile, my parents have *perfect* credit mainly because of my on time payments on their home! Don't get me wrong. I'm very happy for them but this is leaving me struggling to rebuild my own credit after a nasty divorce. UGH!
I can't even get a credit card because I'm self-employed. I make decent money (I'm able to pay a 1100.00 mortgage payment a month!) but since I work for myself no CC company will take me on.
10-15-2012 11:24 AM - edited 10-15-2012 11:24 AM
The only way to get your payments reporting is to refinance [or rather purchase] the house in your name, which would only show an open date of whenever you refi it, as opposed to the org. open date on that loan.
Per FICO scoring you aren't missing all that much, aside from the length of history maybe. There are many in here who have hit into the 800s without a mortgage or any loan reporting.
I know it's a challenge to get a CC while self employed. I am there too. What I found works is to open a secured CC from somewhere. The limit doesn't matter all that much (not per FICO anyway) and once that gets reporting, and you work on any baddies you may or may not have, then you'll find it easier to get CCs.
10-15-2012 11:26 AM
A mortgage is a mortgage account, not revolving.
The credit benefit goes to the account holder. Legally, they are making the payment and you are just giving them gifts. I hope it is a bit less than $1100 or you are over the yearly limit where you have to pay tax on the gifts.
10-15-2012 11:55 AM - edited 10-15-2012 11:56 AM
True to what Greg said. If you pay for your family's mortgage out of your own pocket, it's considered a gift to your folks and it is taxable on your end (not theirs). However, I think the limit is $13k per person per year, so technically you can get away with $26k in payments per year without exceeding that limit which makes it taxable. ETA...your state may have different rules.
Somewhat unrelated and though similar per taxes, my in-laws gave a generous gift of a home to us as a wedding gift. They had bought a new one a couple years prior and used the other as a rental income. When we got married they wanted to give it to us. At the time the home was worth $250k. The limit was $10k or $11k IIRC at that time. So, if DW and I can get $11k tax-free on the in-laws' end, then the in-laws would face a gift tax on $228k which would mean a hefty amount of taxes. And they couldn't sell the home for $1 because they had to have sold it at fair market value. Needless to say, we continue renting and skipped the gift.
Per a secured CC, check with your local bank or CU. There are a lot of good ones out there.
10-15-2012 12:43 PM
Right, I mean you would be just over at $1100 per month. That is $13,200 and the limit is $13,000 for one person. If the mortgage is $1083 or less and you are careful to make sure you pay only 12 payments in the year, you are OK. Otherwise it needs to be spread between two people, not one to one.