No credit, where to begin?

[Anonymous]

How do you start from scratch, when you have no credit at all?  My husband was self-employed with seasonal work for 28 yrs, so everything was in my name, since I had a steady income.  Now, we've learned that he has no credit history at all.  Any suggestions for dos and don'ts on how he should begin?

Thanks in advance.

[llecs]

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Septober wrote:

How do you start from scratch, when you have no credit at all?  My husband was self-employed with seasonal work for 28 yrs, so everything was in my name, since I had a steady income.  Now, we've learned that he has no credit history at all.  Any suggestions for dos and don'ts on how he should begin?

Thanks in advance.

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Since your history is strong, you could add your DH to one or more of your CCs. I would add him to the oldest and cleanest (no lates) CC. That will immediately give him history. Some CCCs have specific rules on who could be a joint user and who can't. You may have to go the authorized-user route, but don't rely on that as FICO is rumored to change in the future and they may omit AUs.

That is the best start. The history would be transferred over as would the postive aspects of the account and he would have an insta-score. Ideally he would want to have 1-2 revolving accounts and one charge account (store, gas, etc.) for optimal scoring. Also, for best results, pay down those CCs to under 10%. Also, once those TLs get placed on his reports, then he could app for new credit himself. If the goal is to establish higher CLs, then aim for a higher CL to add him to as a joint user or AU. In other words, higher CLs begat higher CLs.

[Anonymous]

Good suggestions.  Unfortunately, I don't have any credit cards.  We've been working hard to get MY credit back on track, have paid off our medical bills, student loans, etc.  We got our first house (barely) two and a half years ago, and have a car loan.  All have no late payments for almost 2 yrs.  There's still a few negatives that won't fall off for another 2-3 yrs, but we're getting there.  Current score is 617, and should go up another 20 points or so within the next 3 months if I have no late payments.  I don't think I'm in any position to be a co-signer at this point. 

[llecs]

Don't worry. 617 is a great place to start.

DW and I were in the same boat with 0 CCs, only 1 car note, and a boatload of baddies when we started last August. The rebuild process takes a little time though.

I'd start with pullin all 3 of your reports. I'm guessing that the 617 is your EQ score. Pull from this site the other two reports. Once you have all 3 scores, then use sites like whogavemecredit.com to selectively apply for CCs using your strongest score. So if TU is at 650, for example and is the highest of the 3, then app for CCs that pull TU like WAMU or Nat. City. Compare your FICO scores to others' success/denials. You could also add your DH to those reports then too. Now all of this hedges on whether or not you want a new CC. I think your score will jump once the first CC reports. My score went up around 50 points with the addition of the first 3 cards (2 revolving and 1 charge).

[Anonymous]

Thanks, that sounds good.  Now, that brings up another question.  Maybe this isn't true, but I've heard that you can't get a revolving CC unless you've had a store card for at least 2 yrs.  So, in reality, how hard is it to get a CC?  We just got denied on a car 2 days ago, even though our car payments are on time (one 30 days late, 2 yrs ago).  The sales guy said it was because Capital One didn't want two loans on the same name, but I have trouble believing him on that.  Nevertheless, this denial makes me reluctant to apply for anything else. 

My scores:

TU 624

EQ 636

EX 598 

[llecs]

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Septober wrote:

Now, that brings up another question.  Maybe this isn't true, but I've heard that you can't get a revolving CC unless you've had a store card for at least 2 yrs. 

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That may be a rule for graduating from a store charge card to a revolving CC for a specific creditor, but that would be it. DW had 0 CCs, our first ones were revolving. In fact, both our first two were revolving and our third one was a charge card.

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Septober wrote:

So, in reality, how hard is it to get a CC? 

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Getting the first one isn't easy. Your scores are decent (we started in the 500s). I'd focus on EQ to start and app for EQ pullers. None come to mind specifically, but CUs, in general, tend to pull EQ and CUs are easier to get and offer higher limits. Check in your area for a good CU.

Other CCs include Citi (DW's first CC - 604 on EQ), Chase (probably need higher scores), GEMB (JCPenneys), Penfed, NASA, and others.

Also, don't be afraid to go with a secured CC. Many secured CCs graduate within a year and you'll get your money back and will often get a CLI at that time. Get that first CC and let it report to all 3 CRAs and you'll see a score bump giving you more options for better CCs.

[Anonymous]

Thanks so much!  I appreciate your help, and your time.  I feel like we can really DO this.  Coming back from BK, student loans, astronomical medical bills (child died), etc...made it tough for many years.  Now, the worst thing on my credit is a repo from when I co-signed for a car, and 3 paid medical collections.  They'll all be gone within 3-4 years.  It feels good to finally have a half-decent score, and to have some hope for better financial options when we're ready to do some home improvement.  So let me get this straight, from what you've said and what I've read elsewhere, what we need to do is:

1) Wait 2-3 months for my score to go up, then apply for a revolving credit card in my name only

2) Use the card, up to 35% available, and make the payments on time

2) Wait until the CC posts, then add my husband's name

3) Wait until the CC posts to his name, then he'll have a score, and can establish credit on his own

4) Wash, rinse, and repeat as needed

Is that right? 

[llecs]

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Septober wrote:

Thanks so much!  I appreciate your help, and your time.  I feel like we can really DO this.  Coming back from BK, student loans, astronomical medical bills (child died), etc...made it tough for many years.  Now, the worst thing on my credit is a repo from when I co-signed for a car, and 3 paid medical collections.  They'll all be gone within 3-4 years.  It feels good to finally have a half-decent score, and to have some hope for better financial options when we're ready to do some home improvement.  So let me get this straight, from what you've said and what I've read elsewhere, what we need to do is:

1) Wait 2-3 months for my score to go up, then apply for a revolving credit card in my name only

2) Use the card, up to 35% available, and make the payments on time

2) Wait until the CC posts, then add my husband's name

3) Wait until the CC posts to his name, then he'll have a score, and can establish credit on his own

4) Wash, rinse, and repeat as needed

Is that right? 

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1) after you try repair, then app. However your scores are decent.

2) You can use up to 100%, just make sure less than 10% reports for optimal points.

3) You can add your DH now as an AU. If joint, then you may face some challenges. YMMV.

4) He should see points within 6 months of being added to a new CC or immediately if added to an existing CC. FICO likes to see a 6mo history before assigning points.

5) As needed.

[Anonymous]

Okay, I've got it.  Thanks so much.

[smallfry]

Dollars to donuts you can get approved for an Orchard card with a low limit. AF might run you 70 bucks.
Capital One will offer you a low limit card for around 50 bucks AF.
I would also check the preapproval site at BofA. Worst case they will offer you the secured card for 30 bucks AF.
You most certainly can get a couple rebuilder cards. Good luck.