Monday, December 12, 2011

Getting credit with no credit history?

My husband, myself and 2 yr old have to live with my mom now because we cant afford to get our own place right now. We have been talking to realtors to find a way to get our own place. They said we have no credit and need to get a good credit history before we can go any further in finding a place. We did try to apply for a credit card last year and again this year but have been denied. We need credit to get credit. How do we get credit with no credit history? My mom actually put me on her credit card because we were told it would give me a credit history. How can we get my husband credit?Getting credit with no credit history?
Hi HS-

Here's how I did it after we had gone bankrupt and never rebuilt credit, which can look much worse than NO credit history. I went to my personal bank, Bank of America to speak to a manager. I'd been banking there a few years, so they recognized me. I explained to her I wanted to rebuild my credit. I asked if if they would consider a very small line of credit with a ';secured deposit';. This will work wether rebuilding bad credit, or starting from scratch. This is basically a savings account you cannot touch, and it's tied to the card so if you default, then the bank will have those secured funds to cover any flakiness, lol. The bank let me start with $250 cash deposit into a secured account and gave me a line of credit of $250 at a terribly high interest rate. You have to accept that the rate will be grossly high, but it doesn't matter, because you'll never let a blance carry for more than a billing cycle. So let's say you got the card. That alone isn't going to give you points on your FICO. You have to actually USE this card. Buy a pair of socks, a memory stick for your camera, or a pack of gum, even! Then, when the bill comes in pay it off before the due date on the bill. Every time you do that, your Fico score bumps up. After a while (usually a year) if you've paid every bill on time, they'll raise that limit for you! Making transactions on a credit card and never keeping balances on them is what raises your fico score. Then, as your fico score begins to move up, you will begin to get credit card offers in the mail. Take advantage of the ones with the lowest interst rate. Also, if your mom has a large balance on her credit card, say half of the credit line, then I'd get your name off it as an authorized user. Banks look at that as a negative and it actually pulls your fico score down. I have about 7 cards now, and that's a total miracle. I only have about $100 balance between 2 or 3 of them. I am still rebuilding credit. It can take a while, but it's realllllly worth it. Without good credit, you will be forced to spend much more on large purches like cars and houses; because people with mediocre credit, if approved, will have to pay exorbitant percentage rates because they are ';high risk';. Oh yeah, and make sure to stop using the high percentage rate cards as you rebuild and get newer cards with better interest rates. But don't close the accounts--not just yet. Banks like to see old, established accounts, not too many new accounts. Remember, you want to pay off balances! See, as your score rises, you get better offers in the mail on credit cards offering a lower interest rate. To buy a house, you need at least 2 years on the same job, 4 or more lines of credit with no late payments, low balances on them, a fico score over 750, ideally, and cash in the bank pursuent to down payment $$. What also can help tremendously is to have someone you know let you ';hold'; their money for awhile in your checking account. That helped me! My hubby gave me $5k (tax return money) to put in my checking account. A week later, I went in the bank for something, and the teller said, ';Would you like to take advantage of a line of credit Bof A is offering?'; That blew me away! Yes! So I got a $2000 line of credit on the spot. I hope I've given you some ideas on how to build/rebuild credit. There's also some good workbooks out there on how to do it strategically. Good luck!! By they way, if your hubby is a veteran, he can get a low interest rate home loan with NO down payment.Getting credit with no credit history?
Thank you HS! And you always ask fantastic questions that I'm sure a lot of others have wondered about. I read a lot, plus my kids are all older now, so I've had plently of all sorts of experiences. When we share, then we get to learn and gain insight from eachother. :) Michelle

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If your husband and yourself have have a stable job and have not been blacklisted by any credit debts stuff. You should be able to apply for a credit card easily.

Your husband and yourself should visit a bank and speak with their finance rep. Try to understand why are they rejecting your application for credit card. You could have them make arrange to give you a lower limit credit line. For example, if the average credit line that the bank issue is $5000. You could request for the bank to issue you both with a card of like $1000 or 2000 for a start. As time goes by, if your history is good, the bank may increase it automatically or you could request for it.

go try it out.
You can try applying for a secured credit card, such as the Orchard Bank card. Some banks also issue these cards to their members.
Get a credit card from local bank and pay it in time. You also can use this service to avoid common mistakes while buiding credit and pre-estimate future scores for different scenarios of payments -

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