My DH has no credit. In fact he can't even get credit. Long story short - he did have a credit card 2 years ago - but had problems paying it off on time. So basically credit lawyers for the credit card company called him and offered to settle with him. He paid the settlement figure but now he can't even get a Sears or Macy's credit card.
I was looking into getting him a secured credit card but I also read that banks frown upon those kinds of cards because they don't really establish credit.
What else can he do? In order for him to start his own business he is going to need credit.
Should we talk to our bank about this or is there something else we should know about for getting him credit?
TIA.
aliciahelene
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Re: Establishing credit
I THINK if he had a secure credit card and paid it on time for a year, then it would trun to unsecure and he is building credit every time he pays. A friend did this , she had poor credit, she built up her credit and bought a town house two yaers ago!! Best of luck!!!
dm24angel
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Re: Establishing credit
I got some unsecured low credit but high interest rate cards...I had 3 and the interest was high - about 21% with limits of about $300...I used them wisely....DONT pay them off completly...use them for say Gas...if your min payment is $15 and you balance is $50 then you pay about $35 , thats how you get the credit to go up...if you pay the minimum then they think you cant pay, if you pay it in full, they think you dont need their credit....After using them , I applied for a Capital one card with only 9.9% interest...higher then normal but MUCH lower then the others....and I closed the others...by the way..I still cant get a store card...they are HARDER sometimes....
Try ( unsecured cards with low limits) Orchard BAnk, Legacy Visa, Aspire Visa....
groovypeg
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Re: Establishing credit
go to bankrate.com, they might have some articles about establishing credit.
NPbride
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Re: Establishing credit
I politely disagree w/ the statement about not paying off your credit card b/c then they think you don't need their credit. I have had credit cards for about 7 or 8 years and I have never ever carried a balance; e/t gets paid in full as soon as the bill arrives. I have never had a problem getting a credit card and always at the best rates and I recently got a loan at a 0% rate. As long as you use the credit card and pay either the minimum, more than the minimum, or pay in full it reflects on your credit report. It only reflects poorly on your report if you pay late or not at all. Check out myfico.com they have many tips on how to improve and increase your credit hx. Sorry I can't be more helpful as far as what types of cards to get. Good luck!
september2004
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Re: Establishing credit
Posted by lyndak677
I politely disagree w/ the statement about not paying off your credit card b/c then they think you don't need their credit.
i agree with you...
credit is based on various factors one being the ratio of debt carried to overall credit available. one wants to keep that ratio low to improve the score, i would never pay interest if i didn't have to under the auspices of 'building credit'...
i would get a secured card, pay off all balances in full for 6 months to a year and then apply for a regular card. never carry a balance.
history is also very important towards improving a credit rating. as much as one would want to ditch the secured card once a new card is granted, i would check and weigh the pros and cons to holding onto a secured card vs. getting a replacement card. i have never owned a secured card (so i can’t confidently speak to the specifics), but I know people who have…
to reestablish good credit i would do it in baby steps. manage 2-3 cards and keep the balance low but pay it off in full each month. Suzie Orman has helpful info...
antoinette
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Re: Establishing credit
Posted by Maribelle7777
My DH has no credit. In fact he can't even get credit. Long story short - he did have a credit card 2 years ago - but had problems paying it off on time. So basically credit lawyers for the credit card company called him and offered to settle with him. He paid the settlement figure but now he can't even get a Sears or Macy's credit card.
I was looking into getting him a secured credit card but I also read that banks frown upon those kinds of cards because they don't really establish credit.
What else can he do? In order for him to start his own business he is going to need credit.
Should we talk to our bank about this or is there something else we should know about for getting him credit?
TIA.
dh was in the same boat as yours, what we have been doing and it is helping is that I got adredit card and put his name on it as well as a cardholder and this has reflected positively on his credit report and he recently has gotten many new card offers.
dm24angel
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Re: Establishing credit
Posted by lyndak677
I politely disagree w/ the statement about not paying off your credit card b/c then they think you don't need their credit. I have had credit cards for about 7 or 8 years and I have never ever carried a balance; e/t gets paid in full as soon as the bill arrives. I have never had a problem getting a credit card and always at the best rates and I recently got a loan at a 0% rate. As long as you use the credit card and pay either the minimum, more than the minimum, or pay in full it reflects on your credit report. It only reflects poorly on your report if you pay late or not at all. Check out myfico.com they have many tips on how to improve and increase your credit hx. Sorry I can't be more helpful as far as what types of cards to get. Good luck!
I worked in credit for 5 years and thats exactly what they do..if you pay your balance in full , after two moths your fico will go up 4-7 points, if you paid 60-70% of what you owed your fico would go up 10-14 points....
When I was going thru debt consolidation, the non profit orgization told me this when leaving to handle on my own as well....
ETA: It also does not just depend on whether you pay on time or not at all...If you paid off 6 cards in full every month , versus only having 3 cards and paying less, your score would not improve...you need to have a good ratio and you must substain SOME debt....
My advice to seek a non profit debt counselor to get the tips needed before trying to do it on your own...
dm24angel
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Re: Establishing credit
Posted by september2004
Posted by lyndak677
manage 2-3 cards and keep the balance low but pay it off in full each month. Suzie Orman has helpful info...
If you read Suze Orman's books she too advises to never pay off a card in full each month...
september2004
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Re: Establishing credit
Posted by dm24angel If you read Suze Orman's books she too advises to never pay off a card in full each month...
she does?
i guess one has to be in serious trouble to have to get to that point. it's time vs. $$ i would think... having a credit score well over 800 i must be doing something right
dm24angel
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Re: Establishing credit
Posted by september2004
Posted by dm24angel If you read Suze Orman's books she too advises to never pay off a card in full each month...
she does?
i guess one has to be in serious trouble to have to get to that point. it's time vs. $$ i would think... having a credit score well over 800 i must be doing something right
800 is excellent!
To get to what point? Credit and credit scoring is not as simple as simply paying off a credit card bill...You have to need credit to get it and then sustain it....
Sassyz75
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Re: Establishing credit
My husband's credit isn't as good as mine. I had him LEGALLY put on my CC- Social Security # and everything- wonder if that would helP?
groovypeg
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Re: Establishing credit
is it true that if you have too many redit cards, morgage companies then think you have potential for more debt? i have 4 cc's, of which only 2 have balances. the other 2 i have open for emergencies, but i have not used them in years. should i close them out?
palebride
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Re: Establishing credit
i have a lot more than 4 credit cards and i had no problem getting a mortgage...so i don't think that's true.....but i'm not 100% sure
maiahsdad
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Re: Establishing credit
all i am going to say is dont believe what anyone tells you about credit.........untill you listen to this man....call him e-mail him read his books......and you will have the best credit and more money then you will know what to do with..........here is his linkdave ramsey
nov04LIbride
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Re: Establishing credit
Posted by september2004
Posted by dm24angel If you read Suze Orman's books she too advises to never pay off a card in full each month...
she does?
i guess one has to be in serious trouble to have to get to that point. it's time vs. $$ i would think... having a credit score well over 800 i must be doing something right
I agree--2 years ago I couldn't get any credit card--even Macy's or Target. I had no credit history at all--not bad, just nonexistent. I had been using debit cards so that I made myself save money, and not go into debt. My FH got me my cell as a gift, so it was under his name. I finally got a card (chase mastercard) to take a chance on me, with a very low limit. I also changed the cell to my name. Within a year my limit was up to 5,000, paying balance in full every month. Well I called to get a mortgage last week, my credit score is 780, FH's is 750 (he has several cards and carries some balances and has car payments which I do not, but neither of us has ever paid late). This has worked well for me so far! The mortgage companies were actually very impressed with our scores, and we were quoted some low mortgage rates.
butterfly20
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Re: Establishing credit
maybe captital one? they have a credit card which you have to pay $25 a year service charge... but perhaps he could build credit on it?
