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Tips to build credit need advice

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Anonymous
Not applicable

Tips to build credit need advice

Hello All,

 

I'm on a journey to build credit for my wife.  We have been married 3 years but  she never has had a credit card or loan.  She is orginally from Argentina but has been in the US for 12 years or so but has always used cash or debit card to buy cars and pay her bills.  She was unaware about how credit worked.  So she basically has no credit history good or bad.  

 

I signed her up for a secured card at our bank  6 months ago and she has been using that for gas and paying off each month.  This has generated some cc offers  we got through the mail and I just signed her up for a citi double cash card online (no annual fee) for which she was approved.  She also bought a gold necklace at a jewerly store and instead of paying cash (which we could have done) I had her sign through progressive leasing and make payments.  Ive read that may or may not be good for her score. 

 

Another thing I just did was add her as an AU for my AMEX card i have had since 2002.  My Dad also has great credit and he has an Amex card.  I could have him add her as well if that would help?  I have an 800 credit score already.  No debt except mortgage.  I tried to call the bank to add her to my mortage loan but they said she would need a 600 credit score to be approved to which I'm sure it's not that high yet. 

 

We have both our cars payed off and no debt except the house on a VA loan  (200K) 

 

Another option I was thinking of applying for a personal loan at the bank for her so she would have a installment loan.  Not use the money to buy anything (we have money in the bank)  just for building her score.  I could also get her another credit card so she would have a total of three cards and keep a small 2% balance on one of the cards.  After that just sit tight and let the average age of accounts grow.  I could also add her to the house loan once her credit gets to 600.  

 

My goal for her is to have a 720-760 score in the next 5-7 years.  

 

Sound like a solid game plan?  Any suggestions are welcome and thanks for your time.  

 

 

 

 

Message 1 of 11
10 REPLIES 10
Anonymous
Not applicable

Re: Tips to build credit need advice

All sounds good to me.  I think she'll get to the 720-760 range in far less than 5-7 years as long as she doesn't miss any payments and keeps utilization low.  There are plenty of people on this forum that have gone from nothing (no credit history) to a 700 score in 1 year.

 

Check out the Share Secure loan thread in this section and for an installment loan I'd recommend her doing that.  Everything with the CC's you suggested sounds great.  If she gets the Share Secure loan, I'm not sure you adding her to the mortgage would really have any benefit... others here can chime in on that.  I'm sure at some point she'll need a different car and when that time comes simply finance it rather than pay cash.  Gardening alone IMO will take her to 700 in a year or so, and within 2-3 years she should be able to reach the scores that you're hoping for.

Message 2 of 11
SouthJamaica
Mega Contributor

Re: Tips to build credit need advice


@Anonymous wrote:

Hello All,

 

I'm on a journey to build credit for my wife.  We have been married 3 years but  she never has had a credit card or loan.  She is orginally from Argentina but has been in the US for 12 years or so but has always used cash or debit card to buy cars and pay her bills.  She was unaware about how credit worked.  So she basically has no credit history good or bad.  

 

I signed her up for a secured card at our bank  6 months ago and she has been using that for gas and paying off each month.  This has generated some cc offers  we got through the mail and I just signed her up for a citi double cash card online (no annual fee) for which she was approved.

 

Good

 

 She also bought a gold necklace at a jewerly store and instead of paying cash (which we could have done) I had her sign through progressive leasing and make payments.  Ive read that may or may not be good for her score. 

 

It's bad. Pay it off.

 

Another thing I did was add her as an AU for my AMEX card i have had since 2002.  I have an 800 credit score already.  No debt except mortgage.  I tried to call the bank to add her to my mortage loan but they said she would need a 600 credit score to be approved to which I'm sure it's not that high yet. 

 

We have both our cars payed off and no debt except the house on a VA loan  (200K) 

 

Another option I was thinking of applying for a personal loan at the bank for her so she would have a installment loan.

 

 

OK but not all loans report in a good way. Best way if you feel the need to do this is go to Alliant Credit Union for a share secured loan, pay it down to below 9%, etc.

Personally I think this is overkill in your wife's case. If she does nothing but make good payments on her secured card and Double Cash, she'll reach your goal scores soon enough.

 

Not use the money to buy anything (we have money in the bank)  just for building her score.  I could also get her another credit card so she would have a total of three cards and keep a small 2% balance on one of the cards.  After that just sit tight and let the average age of accounts grow.  I could also add her to the house loan once her credit gets to 600.  

 

My goal for her is to have a 720-760 score in the next 5-7 years.  

 

I think she can reach it within a year.

 

Sound like a solid game plan?  Any suggestions are welcome and thanks for your time.  

 

 

 

 


 


Total revolving limits 657200 (536700 reporting) FICO 8: EQ 712 TU 710 EX 708

Message 3 of 11
Anonymous
Not applicable

Re: Tips to build credit need advice

Thanks for the reply!

 

Ill get her an Alliant 500$ loan and wait for it to post then pay it down to 9%.  

Message 4 of 11
Anonymous
Not applicable

Re: Tips to build credit need advice


@Anonymous wrote:

Hello All,

 

I'm on a journey to build credit for my wife.  We have been married 3 years but  she never has had a credit card or loan.  She is orginally from Argentina but has been in the US for 12 years or so but has always used cash or debit card to buy cars and pay her bills.  She was unaware about how credit worked.  So she basically has no credit history good or bad.  

 

I signed her up for a secured card at our bank  6 months ago and she has been using that for gas and paying off each month.  This has generated some cc offers  we got through the mail and I just signed her up for a citi double cash card online (no annual fee) for which she was approved.  She also bought a gold necklace at a jewerly store and instead of paying cash (which we could have done) I had her sign through progressive leasing and make payments.  Ive read that may or may not be good for her score. 

 

Another thing I just did was add her as an AU for my AMEX card i have had since 2002.  My Dad also has great credit and he has an Amex card.  I could have him add her as well if that would help?  I have an 800 credit score already.  No debt except mortgage.  I tried to call the bank to add her to my mortage loan but they said she would need a 600 credit score to be approved to which I'm sure it's not that high yet. 

 

We have both our cars payed off and no debt except the house on a VA loan  (200K) 

 

Another option I was thinking of applying for a personal loan at the bank for her so she would have a installment loan.  Not use the money to buy anything (we have money in the bank)  just for building her score.  I could also get her another credit card so she would have a total of three cards and keep a small 2% balance on one of the cards.  After that just sit tight and let the average age of accounts grow.  I could also add her to the house loan once her credit gets to 600.  

 

My goal for her is to have a 720-760 score in the next 5-7 years.  

 

I went from no score or file to 750/750/769 in six months on a single secured card, so that's not unreasonable.  Granted, I still have a very thin file though your DW will benefit in that regard from being an AU on your AMEX as well as the other card and loan.

 

Sound like a solid game plan?  Any suggestions are welcome and thanks for your time.  

 

 

 

 


 

Message 5 of 11
RonM21
Valued Contributor

Re: Tips to build credit need advice

I think you'll get your goals accomplished in no time. Stick to the plan and the advice and you'll be happy with the results.


Total CL: $321.7kUTL: 2%AAoA: 7.0yrsBaddies: 0Other: Lease, Loan, *No Mortgage, All Inq's from Jun '20 Car Shopping

BoA-55k | NFCU-45k | AMEX-42k | DISC-40.6k | PENFED-38.4k | LOWES-35k | ALLIANT-25k | CITI-15.7k | BARCLAYS-15k | CHASE-10k

Message 6 of 11
Anonymous
Not applicable

Re: Tips to build credit need advice

 

 

UPDATE:

 

How accurate is Credit Karma?  I just registered (surprised it was free?)  and it says she has a 705 TU and 681 EQ score.  

 

I forgot she was an AU on my Chase Sapphire and apparently TU reports it and EQ doesn't

 

Her age of credit history is only 10 months.

 

EQ says 48% utilization  on her secured card. (only 600$ limit)  whoops,  Ill tell her to fill up only once a month to bring below 9%

 

only 3% utilization on TU since it's combined with the 10k CL of the sapphire card.  

 

0 derogs

 

perfect payment history

 

It says she has low amount of total accounts

 

She will have 1 more with the Citi Card she just got approved for, another AU on my AMEX that I did today, and Ill get her a secured loan

 

................and off to the garden she goes.  

 

it's weird though that if she had a 600+ score she didn't even qualify for a Fred Myers (store) credit card and had to go through progressive leasing to get a loan for her 300$ gold chain.   Maybe because of the weak credit history?

Message 7 of 11
Anonymous
Not applicable

Re: Tips to build credit need advice


@Anonymous wrote:

 

 

UPDATE:

 

How accurate is Credit Karma?  I just registered (surprised it was free?)  and it says she has a 705 TU and 681 EQ score.  

 

I forgot she was an AU on my Chase Sapphire and apparently TU reports it and EQ doesn't

 

Her age of credit history is only 10 months.

 

EQ says 48% utilization  on her secured card. (only 600$ limit)  whoops,  Ill tell her to fill up only once a month to bring below 9%

 

only 3% utilization on TU since it's combined with the 10k CL of the sapphire card.  

 

0 derogs

 

perfect payment history

 

It says she has low amount of total accounts

 

She will have 1 more with the Citi Card she just got approved for, another AU on my AMEX that I did today, and Ill get her a secured loan

 

................and off to the garden she goes.  

 

it's weird though that if she had a 600+ score she didn't even qualify for a Fred Myers (store) credit card and had to go through progressive leasing to get a loan for her 300$ gold chain.   Maybe because of the weak credit history?



CK scores aren't aligned with the Fico score, their scoring system is called Vantage I believe and not a lot of lenders use the vantage score from my experience. CK vantage score is different than Fico score which is what most lenders use.

I only use CK for monitoring: inq, utilization, AAOA, and length of accounts.

 

Btw, paying for things in credit doesn't mean you don't have the money for

it. I pay for everything in credit, reap the rewards& then pif. Just saying 🤓

 

Message 8 of 11
Anonymous
Not applicable

Re: Tips to build credit need advice

Good luck on the journey! Hope all goes well and most of all, have fun! 

 

 

I find all of this to be fun, somewhat of a hobby I guess. Smiley Happy

Message 9 of 11
takeshi74
Senior Contributor

Re: Tips to build credit need advice


@Anonymous wrote:

How accurate is Credit Karma?


You have to be careful relying on CK.  As far as its scores are concerned, all scoring models are accruate.  However, you need to consider specific scoring models and the relevance of a given model & CRA combo to a given creditor/product.  Credit Karma's scores are only relevant to creditors that use a TU or EQ VantageScore 3.0.  Most creditors use a FICO model but even FICO doesn't have just one model.  See also the Understanding FICO Scoring subforum and its stickies for info on the various FICO models used by creditors.

 

You cannot use a score generated by one model to determine a score generated by another model.  A given model's accuracy isn't about how it mimic other models.  If you're trying to determine VantageScore 3.0's accruacy based on how well it mimics other models then you're using it wrong.  The same applies to all other scoring models.  Even the FICO models will generate different numbers for a given report since different models evaluate report data differently and can even have different score ranges.

 

If you want to know where you stand score wise when it comes to a specific creditor/product then you need to know the CRA and model used in the credit decision for that creditor/product and then go pull that score, if available.  However, keep in mind that it's never just about score.  A creditor/product's underwriting criteria and one's entire credit profile matter as well.  Score is just one consideration that a creidtor will use.

 


@Anonymous wrote:

I just registered (surprised it was free?)


CK makes money off of referrals so, as always, consider the source if you look at their suggestions.

 


@Anonymous wrote:

Her age of credit history is only 10 months.


Don't rely on CK for Average Age of Accounts.  CK only considers open accounts.  The FICO models that most creditors use consider open and closed accounts on a report.

 

You can calculate AAoA yourself.  It's just an average.  If you don't want to manually perform the date math then try a spreadsheet and make use of its date functions.  There are also a number of online AAoA calculators out there.

 


@Anonymous wrote:

EQ says 48% utilization  on her secured card. (only 600$ limit)  whoops,  Ill tell her to fill up only once a month to bring below 9%


You can restrict spend but you can also pay down the balance prior to report date ot manage revolving utilization.  You don't need to constantly keep it under 9%.  Just generally keep it under 30%.  You can drop it as needed when applying for new credit, requesting CLI's, etc.

 


@Anonymous wrote:

It says she has low amount of total accounts


Don't read too much into that.  That assessment is based on correlation.  People with high scores tend to have more accounts but a high number of accounts isn't necessary for high scores.  Note that even CK indicates that it is a low impact factor.

 

Our general recommendation is at least 2-3 cards for scoring purposes.  Anything above that is a matter of one's specific needs/wants.  Don't let score drive your decisions on this and don't rely solely on opening new accounts to raise score.  If she's building her credit profile then she will be limited in the number of new accounts supported before seeing negative impact.

 


@Anonymous wrote:

 

it's weird though that if she had a 600+ score she didn't even qualify for a Fred Myers (store) credit card and had to go through progressive leasing to get a loan for her 300$ gold chain.   Maybe because of the weak credit history?


Not weird at all.

 

You'll want to verify what model & CRA is used for Fred Myers versus just assuming that CK's scores are relevant.  The model used by Fred Myers may produce different numbers.  Additionally, it's never just about score.  It's going to take time and responsible usage for her to build her credit.  Don't expect to rely on quick fixes.

 


@Anonymous wrote:

We have both our cars payed off and no debt except the house on a VA loan  (200K) 

 

How many open installments are on her reports?  Be aware that the benefit to Credit Mix from having an installment is lost once the last installment on a report is closed.  That said, don't just open an installment for scoring purposes.  Open them as your financial needs dictate.  For FICO scoring consider the typical relative weights of the factors.

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

 

 

Don't overlook the stickies in the various subfora and don't overlook prior discussions as resources.  These are all very common topics.

Message 10 of 11
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