topic Re: Advice about starting from scratch in General Credit Topics

Advice about starting from scratch

Anonymous — Wed, 04 Mar 2020 05:12:09 GMT

Hey all,

I came here specifically to ask for some advice for my clients, collectively. I occasionally interact with survivors of domestic violence, and I sometimes feel like I don't have the best answers to give them when it comes to finances. I have stalked these forums for years and gotten so much good information, but have never posted. I would like input on the following:

What advice would you give to someone who finds themselves relocated to a different state, with a new name and social security number. Typically these clients are women, and although some are employable at average or above incomes, most are in the lower income brackets. Escaping violence means these people have left behind college degrees, work history, etc. for the sake of safety.

Typically they have obtained a sealed name change, a new social security number, and a birth certificate with their new name. This poses a number if problems, maybe more than it solves in some cases, one of which is how the client is to go about establishing a financial history and credit. They must walk away from previous financial relationships because to keep them would be to risk their abuser finding them.

What are the best steps for someone in this situation to take? Obviously one of the first priorities is to establish a checking account, which is generally simple enough. Are there any banks that are particularly good or bad in terms of privacy? I have always assumed they are about the same.

Also, what would the best first steps be for someone in this situation to establish credit? My standard recommendation tends to be a secured card. Do you guys have any more specific ideas?

These clients tend to get hit with a ton of inquiries on brand new, baby credit thanks to apartment, utility, bank account, etc. applications. Is there any way for them to minimize the damage?

Some clients also need to be able to finance a vehicle relatively quickly, before they have established any credit. Is there any alternative to the terrible buy-here-pay-here places?

What would the best long-game strategy be in these kinds of situations, if the goal is for the client to eventually have a decent credit score without exposing them to the risks of applying for credit repeatedly, by virtue of getting turned down? Every instance of sharing information is a risk of discovery, regardless of how small, and must be reduced as much as possible. I'm guessing the thing to do is only apply for products they are sure they are qualified for, but that's difficult with no history.

I know that was a bunch of questions in one post, and I sincerely appreciate any advice on any of those points that anyone can give!

Thanks again.

Re: Advice about starting from scratch

Chris679 — Wed, 04 Mar 2020 08:59:21 GMT

Starting out from scratch I think most people here would tell you to find a good local credit union. Start with a checking and savings and then try to work your way up to line of credit, credit card, auto loan, etc. through them. I always recommend Capital One for thin files looking for that first or second credit card also. I'm not a fan of store cards, but Walmart is another one that I think is a good choice if you are starting out.

As far as inquires, the types of apps that you mentinoned are going to be soft pulls and not hard pulls so they do not impact your credit file. Some of them of course won't like to see nothing on the report when they pull it though.

You do not need alot of accounts to achieve a decent credit score and be able to get approved for credit. 1-2 cards plus a car loan and maybe an overdraft protection line of credit if it is available and you are set. After than only apply for things as needed. Best of luck.

Re: Advice about starting from scratch

Adkins — Wed, 04 Mar 2020 09:49:25 GMT

@Anonymous wrote:
Hey all,

I came here specifically to ask for some advice for my clients, collectively. I occasionally interact with survivors of domestic violence, and I sometimes feel like I don't have the best answers to give them when it comes to finances. I have stalked these forums for years and gotten so much good information, but have never posted. I would like input on the following:

What advice would you give to someone who finds themselves relocated to a different state, with a new name and social security number. Typically these clients are women, and although some are employable at average or above incomes, most are in the lower income brackets. Escaping violence means these people have left behind college degrees, work history, etc. for the sake of safety.

Typically they have obtained a sealed name change, a new social security number, and a birth certificate with their new name. This poses a number if problems, maybe more than it solves in some cases, one of which is how the client is to go about establishing a financial history and credit. They must walk away from previous financial relationships because to keep them would be to risk their abuser finding them.

What are the best steps for someone in this situation to take? Obviously one of the first priorities is to establish a checking account, which is generally simple enough. Are there any banks that are particularly good or bad in terms of privacy? I have always assumed they are about the same. I would also recommend a local credit union. Any financial institution has their own privacy policies which are usually very good - they don't want to get sued for privacy violations.

Also, what would the best first steps be for someone in this situation to establish credit? My standard recommendation tends to be a secured card. Do you guys have any more specific ideas? Besides checking with their new local credit union, I highly recommend Discover or Capital One for their secured cards. Discover especially, since there isn't an annual fee and they have a good graduation rate.

These clients tend to get hit with a ton of inquiries on brand new, baby credit thanks to apartment, utility, bank account, etc. applications. Is there any way for them to minimize the damage? No way to minimize the damage, but creditors usually aren't going to look at housing and related HPs the same as a HP from a creditor for credit.

Some clients also need to be able to finance a vehicle relatively quickly, before they have established any credit. Is there any alternative to the terrible buy-here-pay-here places? I would try their new credit union or Capital One auto, via online, especially after getting a secured card with them. The rates may not be that great, but it's better than the buy-here-pay-here-ripoffs. After 6-12 months of good credit history, I'd recommend getting the loan refinanced if the rate is higher than they like.

What would the best long-game strategy be in these kinds of situations, if the goal is for the client to eventually have a decent credit score without exposing them to the risks of applying for credit repeatedly, by virtue of getting turned down? Every instance of sharing information is a risk of discovery, regardless of how small, and must be reduced as much as possible. I'm guessing the thing to do is only apply for products they are sure they are qualified for, but that's difficult with no history. I'd keep applications to only the cards or loans that they need, as you just stated. Three cards give the maximum FICO scores, but two cards is just fine too, when combined with a loan. It takes a little time to get a decent score going.

I know that was a bunch of questions in one post, and I sincerely appreciate any advice on any of those points that anyone can give!

Thanks again.

My recommendations are in bold.

Re: Advice about starting from scratch

GApeachy — Wed, 04 Mar 2020 10:39:34 GMT

Recently this is a Discover card "Thing" ......they are requesting tax return transcripts (4506-T) for up to 2 or 3 prior years. That could affect some of these relocated/new life/no past life ppl. See what I'm saying? I'm not down on Discover but I think about these ppl not having a History, No hate....just wanna point it out.

Re: Advice about starting from scratch

Adkins — Wed, 04 Mar 2020 11:56:18 GMT

@GApeachy wrote:
Recently this is a Discover card "Thing" ......they are requesting tax return transcripts (4506-T) for up to 2 or 3 prior years. That could affect some of these relocated/new life/no past life ppl. See what I'm saying? I'm not down on Discover but I think about these ppl not having a History, No hate....just wanna point it out.

I'm aware of what Discover has been requesting from some customers but I don't think it's going to be relevant to their situations the OP is talking about. They aren't using a CPN because they'll have SSNs, they will have new addresses on file and as long as their stated income matches what they make, there shouldn't be a problem. For every horror story that gets posted here, they are probably plenty of other people that had no issue getting a secured card with Discover.

Re: Advice about starting from scratch

GApeachy — Wed, 04 Mar 2020 12:09:06 GMT

@Adkins

I'm talking about SSN with no Prior Tax Return on file....which is how Discover verifies "stated income" SHOULD they ask- that's all. Just wanted to point that out to OP that that can possibly happen. The CPN thing is not an issue here.

Re: Advice about starting from scratch

Gladius — Wed, 04 Mar 2020 13:45:24 GMT

@Anonymous wrote:
Hey all,

I came here specifically to ask for some advice for my clients, collectively. I occasionally interact with survivors of domestic violence, and I sometimes feel like I don't have the best answers to give them when it comes to finances. I have stalked these forums for years and gotten so much good information, but have never posted. I would like input on the following:

What advice would you give to someone who finds themselves relocated to a different state, with a new name and social security number. Typically these clients are women, and although some are employable at average or above incomes, most are in the lower income brackets. Escaping violence means these people have left behind college degrees, work history, etc. for the sake of safety.

Typically they have obtained a sealed name change, a new social security number, and a birth certificate with their new name. This poses a number if problems, maybe more than it solves in some cases, one of which is how the client is to go about establishing a financial history and credit. They must walk away from previous financial relationships because to keep them would be to risk their abuser finding them.

What are the best steps for someone in this situation to take? Obviously one of the first priorities is to establish a checking account, which is generally simple enough. Are there any banks that are particularly good or bad in terms of privacy? I have always assumed they are about the same.

Also, what would the best first steps be for someone in this situation to establish credit? My standard recommendation tends to be a secured card. Do you guys have any more specific ideas?

These clients tend to get hit with a ton of inquiries on brand new, baby credit thanks to apartment, utility, bank account, etc. applications. Is there any way for them to minimize the damage?

Some clients also need to be able to finance a vehicle relatively quickly, before they have established any credit. Is there any alternative to the terrible buy-here-pay-here places?

What would the best long-game strategy be in these kinds of situations, if the goal is for the client to eventually have a decent credit score without exposing them to the risks of applying for credit repeatedly, by virtue of getting turned down? Every instance of sharing information is a risk of discovery, regardless of how small, and must be reduced as much as possible. I'm guessing the thing to do is only apply for products they are sure they are qualified for, but that's difficult with no history.

I know that was a bunch of questions in one post, and I sincerely appreciate any advice on any of those points that anyone can give!

Thanks again.

Not to get off the subject or to undermine the effects of domestic abuse, but if someone gets in that much dire straits to become a "new person" as you say, shouldn't the husband be in jail/prison, thus alleviating the threat? I mean, I know the law/courts don't grant new identities just for a simple "domestic assault", it would have to be repeated acts of terror on one's life right?

Re: Advice about starting from scratch

jamie123 — Thu, 05 Mar 2020 05:39:51 GMT

You've received some excellent advice here.

My thoughts:

Definitely join a credit union and build that realationship
Capital One is a great first credit card (They also service Walmart cards now too.)
Open Sky Credit Cards - They only do secured cards and WON'T PULL YOUR CREDIT AT ALL! They are also reasonable about fees and don't rip people off like other (Credit One) secured card lenders do. You can get them a card imediately as long as they have the money to secure the card.
Discover has a great record unsecuring cards within the first year.

Credit cards are the foundation for building really high credit scores that will stay with you for life. Just make sure they understand about budgeting and not carrying balances.

Re: Advice about starting from scratch

Anonymous — Sun, 15 Mar 2020 08:27:53 GMT

It will be same process as somebody who is building credit from scratch

Basically all the suggestions in this forum for rookies apply as the person has a completely new identity. The old identity CANNOT be tied to the old identity. So person needs to start as if she/he never had any credit.

Re: Advice about starting from scratch

SouthJamaica — Mon, 16 Mar 2020 02:37:58 GMT

@Anonymous wrote:
Hey all,

I came here specifically to ask for some advice for my clients, collectively. I occasionally interact with survivors of domestic violence, and I sometimes feel like I don't have the best answers to give them when it comes to finances. I have stalked these forums for years and gotten so much good information, but have never posted. I would like input on the following:

What advice would you give to someone who finds themselves relocated to a different state, with a new name and social security number. Typically these clients are women, and although some are employable at average or above incomes, most are in the lower income brackets. Escaping violence means these people have left behind college degrees, work history, etc. for the sake of safety.

Typically they have obtained a sealed name change, a new social security number, and a birth certificate with their new name. This poses a number if problems, maybe more than it solves in some cases, one of which is how the client is to go about establishing a financial history and credit. They must walk away from previous financial relationships because to keep them would be to risk their abuser finding them.

What are the best steps for someone in this situation to take? Obviously one of the first priorities is to establish a checking account, which is generally simple enough. Are there any banks that are particularly good or bad in terms of privacy? I have always assumed they are about the same.

Also, what would the best first steps be for someone in this situation to establish credit? My standard recommendation tends to be a secured card. Do you guys have any more specific ideas?

These clients tend to get hit with a ton of inquiries on brand new, baby credit thanks to apartment, utility, bank account, etc. applications. Is there any way for them to minimize the damage?

Some clients also need to be able to finance a vehicle relatively quickly, before they have established any credit. Is there any alternative to the terrible buy-here-pay-here places?

What would the best long-game strategy be in these kinds of situations, if the goal is for the client to eventually have a decent credit score without exposing them to the risks of applying for credit repeatedly, by virtue of getting turned down? Every instance of sharing information is a risk of discovery, regardless of how small, and must be reduced as much as possible. I'm guessing the thing to do is only apply for products they are sure they are qualified for, but that's difficult with no history.

I know that was a bunch of questions in one post, and I sincerely appreciate any advice on any of those points that anyone can give!

Thanks again.

My advice would be to walk in to a branch of the local credit union, start a savings account and a free checking account, and get a secured credit card.

Re: Advice about starting from scratch

mikesonthemend — Mon, 16 Mar 2020 02:47:34 GMT

@Anonymous wrote:
...

... Escaping violence means these people have left behind college degrees, work history, etc. for the sake of safety.

This is great work you are doing. God bless!

I can help with the above item. As identity theft has become pervasive, most accredited institutions of higher learning have the ability to update graduate information in the clearing house. I realize this may be more of a leap of faith than many of your constituents are interesting in taking. Just thought I would share.

Good luck to you and all those you are helping.

Re: Advice about starting from scratch

Anonymous — Thu, 16 Apr 2020 18:12:48 GMT

I was issued a new name and social due to identity theft and personal circumstances. I was able to call some of my accounts and have my info changed in their systems, and they are now making their way to my new credit report. This did NOT cause a mixed/crossed file. It's taking some time to straighten itself out, but I don't show as 'new' anymore.

Re: Advice about starting from scratch

Anonymous — Mon, 20 Apr 2020 22:28:19 GMT

I started my credit journey about five years ago from no credit/no score. Building up my credit was the hardest thing to do when no one wanted to give me credit. Everything credit pull was a gamble with having baby credit. There is no minimal impact way or this card works for all remedy someone with no credit is starting out.

1. Like others have posted, I started with a Cap1 secure card. If I reminder correctly they only gave me a $100 limit at the start. Usually after 3-6 months, the credit limit will be automatically increase, and in some cases promoted to a unsecure card like the QuickSilver.

Another card is CreditOne secured card. I don't recommend getting this card as it has alot of fees and I had friends tell me crazy horror stories (e.g. being late for payment because of paid on your due date) however, it is another card that I know people got when they weren't approved for Cap1 secured.

2. Turn the inquires for rent a positive report on their credit report! I don't know how to do this but there is a way to report your rent to the credit bureaus. That in turns creates another credit line and credit trustworthiness!

3. No real solution to vehicle finanicaling with no established credit unless they are buying a hooptie and/or paying the whole thing in cash. I believe it took me two and a half years of credit growth to qualify for an auto loan and it was a measily $4k or $5k with 730-ish scores across the board. Then I had to dispute 12 HP inquires, which I specifically had a written contract to only do one with my credit union (which didn't approve me thus why I didn't recommend credit unions for credit cards/auto loans. I do however believe in using credit unions for personal loans, they usually give small amounts and the approval process is more successful than the bigger banks.)

Hope that helps a little.