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Plan to help my wife's FICO score

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Anonymous
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Plan to help my wife's FICO score

Here is the backstory, I moved to this country about 15 years back, my wife joined me in my journey as a dependent who was not able to work or have SSN up until a little over year ago. I opened my first CC after my arrival and I was able to get unsecured card around 14 years back. Luckily I added my wife as AU on couple of my old cards which actually do show up in her reports.

 

When she got her SSN we applied for Discover IT secure card about a year ago, which got converted to unsecured card within 6 month, she is still on atleast 3 of my old credit cards, hence her credit age show around 14 years compared to 1 which is what it should be if solely based on her SSN.

 

Her current FICO score via Discover card is 800+ so my question is should I add more cards under her or just let it be and one account is enough to establish a good credit. Should I wait or open atleast couple more cards right now, she doesn't have anything other than Discover CC and my old AU accounts right now in her report. Any advice on the matter would be appreciated.

 

Message 1 of 11
10 REPLIES 10
Medic981
Valued Contributor

Re: Plan to help my wife's FICO score

Welcome to the myFICO forums!

 

Ultimately, what a person needs to improve their FICO scores and build credit are three open credit cards (secured or unsecured) in good standing and one open installment loan in good standing such as a car, home, student, personal, share secured, or credit building loan. This combination is what the myFICO score theorists here have determined is what you need for optimal credit building and FICO score. You can have more CCs and more installment loans, however, this will not increase your FICO scores.

Next, (this is only important if you are attempting to purchase a large ticket item like a home or car) is paying in full all of the credit card balances each month, before the posting date, except one. This is called the All Zero Except One (AZEO) method. The one credit card you allow to post a balance needs to be less than 8.9% of the credit limit of the card. So using one card each month to buy lunch, letting it report and then paying in full will maximize FICO scoring. Keeping your utilization of your cards below 28.9% both individually and collectively will prevent you from incurring a FICO scoring penalty.

An installment loan will have its greatest impact on your FICO score when the amount owed is at 8.9% or less of the original amount owed which is usually in the final months before the loan is paid in full. If you don't have an installment loan you can check into Self Lender or a Share Secured Loan at a Credit Union.

Keep in mind, building credit is a marathon, not a sprint. It involves demonstrating to a potential creditor that you can handle credit responsibly. If you have open, active credit accounts that are being paid on time and pay all of your bills on time every time, apply for credit only when you actually need it and use credit cards sparingly maintaining low credit utilization, then you’re going to earn and maintain great credit scores. It would be impossible for you not to do so. This is the fastest way you can build good, solid credit.







Your FICO credit scores are not just numbers, it’s a skill.
Message 2 of 11
Anonymous
Not applicable

Re: Plan to help my wife's FICO score

So it looks like I need to have her open two more cards and have Secure Share Loan, do you need to have mix of store card and regular CC or it doesn't matter for revolving credit card.

Message 3 of 11
Anonymous
Not applicable

Re: Plan to help my wife's FICO score


@Anonymous wrote:

So it looks like I need to have her open two more cards and have Secure Share Loan, do you need to have mix of store card and regular CC or it doesn't matter for revolving credit card.


Absolutely not.  Your wife already has an 800 score so it really doesn't need any "improvement."

 

EDIT:

I suppose I should expand on my initial response. 

Unless your wife is interested in actively managing her credit, and/or you intend to remove her as an AU from your credit cards I would just leave it alone.

 

Adding two cards and an installment loan will optimize her credit scores BUT she has already achieved an 800 score and adding three new accounts will cause her scores to fall in the short term because of the scoring penalties associated with new accounts.  Perhaps you could do a Share Secured loan and pay it down immediately to below 8.9%.  That would improve her credit mix by adding an installment loan to her credit report; and she would get a score boost for having a loan with a balance below 8.9%.  Then perhaps you can add another credit card or two at six-month intervals to minimize the new account penalty.

Message 4 of 11
Anonymous
Not applicable

Re: Plan to help my wife's FICO score

My credit union offers Share secure loan so that’s something I am looking to get her added onto. She is not actively managing I have to help her with setting up a proper credit file and score as she is of the mentality no credit no debt better life.

The only credit that we would need in near future is a mortgage and I am still figuring that strategy out, I have low 700s as my score but got income to show while her scores are in low 800s with not much income. I am planning on getting mine in mid 700s but while I am doing those figured I get her in a good spot where we take the hit now and be done and won’t need to do any further changes after 6 months.
Message 5 of 11
Anonymous
Not applicable

Re: Plan to help my wife's FICO score


@Anonymous wrote:
My credit union offers Share secure loan so that’s something I am looking to get her added onto. She is not actively managing I have to help her with setting up a proper credit file and score as she is of the mentality no credit no debt better life.

So thats the secret to 800+ Smiley Surprised

Message 6 of 11
SarahJo
Established Contributor

Re: Plan to help my wife's FICO score


@Anonymous wrote:

Here is the backstory, I moved to this country about 15 years back, my wife joined me in my journey as a dependent who was not able to work or have SSN up until a little over year ago. I opened my first CC after my arrival and I was able to get unsecured card around 14 years back. Luckily I added my wife as AU on couple of my old cards which actually do show up in her reports.

 

When she got her SSN we applied for Discover IT secure card about a year ago, which got converted to unsecured card within 6 month, she is still on atleast 3 of my old credit cards, hence her credit age show around 14 years compared to 1 which is what it should be if solely based on her SSN.

 

Her current FICO score via Discover card is 800+ so my question is should I add more cards under her or just let it be and one account is enough to establish a good credit. Should I wait or open atleast couple more cards right now, she doesn't have anything other than Discover CC and my old AU accounts right now in her report. Any advice on the matter would be appreciated.

 


...But her score is 800+?  Does she currently have income that would help when applying for a mortgage?  Does she NEED a credit card, as in is there a CC product out there that suits her needs?  You make the point that her particular financial philsophy is suited to just what she's doing, thus her credit score is better than "good," so what would be the purpose of applying for cards just to have them?  I do understand the "thin file" aspect, which is what you may be referring to...As someone who works in the field of finances, if someone has a particular method of credit management/day to day finances that truly works and all is well, I say don't mess with it. 

 

EDIT: Just my .02...I learned that once I complicated my husband's finances in the pursuit of cashback the waters got too "muddy" for him, and we're only in our 30's haha!


Present Day...Equifax: ???, TransUnion: 777, Experian: 781
Sept. 2016...Equifax: 652, TransUnion: 608, Experian: 597
Message 7 of 11
Anonymous
Not applicable

Re: Plan to help my wife's FICO score

@SarahJo sorry for the delay but like you said my only concern is she has thin file just one account of her own, which is why I am planning to add some accounts so she has credit activity of her own. I did open a share secure loan but not sure if they are reporting yet. Her current Fico score 8 via discover is 801.

Message 8 of 11
SarahJo
Established Contributor

Re: Plan to help my wife's FICO score


@Anonymous wrote:

@SarahJo sorry for the delay but like you said my only concern is she has thin file just one account of her own, which is why I am planning to add some accounts so she has credit activity of her own. I did open a share secure loan but not sure if they are reporting yet. Her current Fico score 8 via discover is 801.


Ah I see, so this is a type of "something to do" sort of deal?  Whatever floats your boat, as long as things are managed properly all will hopefully still be well for her score wise over time.  As previously mentioned, you'll be paying the loan down to 8.9% util when all goes through?  Also, again, as previously mentioned, be sure to be prepared for her scores to drop during this process and allocate time for them to recover in your  plan.  Best of luck and be sure to keep us updated on your process and the behavior of her scores, very interested to see! 


Present Day...Equifax: ???, TransUnion: 777, Experian: 781
Sept. 2016...Equifax: 652, TransUnion: 608, Experian: 597
Message 9 of 11
Kforce
Valued Contributor

Re: Plan to help my wife's FICO score


@Anonymous wrote:
Her current FICO score via Discover card is 800+ so my question is should I add more cards under her or just let it be and one account is enough to establish a good credit. Should I wait or open at least couple more cards right now, she doesn't have anything other than Discover CC and my old AU accounts right now in her report. Any advice on the matter would be appreciated.

I believe it takes more than just an excellent Fico score to really have good credit.

An 800+ Fico will not get you a loan without many other factors.

I would add a couple more cards, and get an SSL.

 

I am helping my youngest daughter strenghten her credit profile as we speak.

Same general plan, 3 cards and a loan.

One secured credit card ($2,000), 4.5 years age. Ficos (795, 805, 808)

Ficos above 800,  but one secured card <> good credit.

Just had her get a Discover-It-Student ($1,500).

In 6-9 months go for an SSL and then another credit card.

In just a couple of years this will both improve her Fico scores and provide a stronger credit profile.

The real goal is to be able to get the best rates for larger loans, car, mortgage, etc.

An 800 Fico is just one small part, not the end goal.

I have done the same for my wife, and older daughter.

If anything happened to me, each has a good credit profile, and excellent Fico's on their own.

 

Message 10 of 11
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