Building Credit

[L.G.]

Finally all done with the exhausting immigration process and my wife will be arriving next week, only three weeks after I had to leave China! One of the to-do items on our list is to buy a house, which in order for us to purchase together will likely require her to have some credit history.

 

Does anyone have any good tips or experiences in building up credit for their immigrant spouse? She has already secured a job so will have income, and I will be adding her to my existing credit cards which are in good standing. Looking for whatever else we can do to help.

[credzba]

We bought a house together before my wife was in the USA .. my income / credit history was sufficient, so I am certain your wife not having a credit history wont be an issue.

 

I felt that a good credit rating was important though, like you, so what I did was got a costco membership, with the associated american express card in her name only. I later got a user card on her account, but the important thing is for the card to be in her name for credit reporting.

Costco would guarantee her a card, and we use costco anyway, so it worked but anyplace that will guarantee a card without consideration of credit history works.

 

Then, we used that card for everything. It started with a 2,000 credit limit, but within a year or 2 it was up to 10,000 limit (we used it for remodelling the house).

 

Since I always paid it in full, the intrest rate was irrellevent, and don't believe those stories of you have to pay some intrest to get a good credit score.

Her score is over 750 now, and she has never paid 1 cent of intrest.

[Allon]

Most banks will allow a second account with you as the primary and her as the secondary. (Usually you have to have a minimum amount in the primary account.) Put some money ($1000) in that account for her to use with an ATM or debit card. If she uses it wisely, the offers of credit apps will come along with time, maybe 6 -12 months. When you get a department store account add her to it with a card. She may never use it but credit companies look at her name. If you are good with credit she will show up too and get offers. We are getting offers for a card for her that fortunately I get first so I can screen them. Up to you to monitor....

[Dennis143]

All answers so far are correct.

 

My wife has been here close to 15 years now and has not established credit. We bought our home and have refinanced it twice through Wells Fargo. As long as your wife does not show having bad credit, you can easily add her name to the trust deed.

 

The question is, how good is your credit? Lenders are very tight now - main points are debt to cash ratio, total assets and length of time having a credit history (the longer your good credit history the better).

[tsap seui]

All great advice above. And a damn good question. We all have had this question with our wives and children.

 

My wife and son came over in August 2011. Within 2 months of them being here I sent in $200 (each) for those secure credits card you can get. I explained to them about building a credit history. I took them both to our local little bank and opened bank accounts in their names. Well, I tried for my son but they wouldn't let him open an account until he was 18 (yes, I thought that was crazy , too). No matter, he had his secure credit card. My main purpose to have accounts in their names was I wanted them to take out loans that they could start paying back as another tool to build their credit histories as quickly as possible. We talked to the lending officer at the bank and explained what we were trying to do. For my wife they did it right then,and once my son turned 18 they did for him also.

 

When they opened their accounts we put a few hundred dollars in each account, and we took out loans for each of them for $1,000 for 12 month terms. I had to co-sign for each loan, of course. They deposited the loan money into their account and had the bank make automatic withdrawals for their loan payments each month....towards the end of the loans I made sure they had the money in the bank account for that last payment. Being Chinese, there was NO PROBLEM with them having enough money for those last payments...LOL

 

Go forward a couple of years and now they could either one take out a loan without me co-signing. My insurance company USAA has now given my wife a credit card for $15,000 and has given my son a college student type credit card. We have done away with those secured cards...they served their purposes.

 

I bought a home for my family in October of 2011, but I could NOT get my wife's name on the loan. In January of 2012 I bought my wife a 6 unit apartment complex....tried again to get her name on that loan....no dice....too early I was told. So....I waited until her credit history had some time and I did a refinance with USAA and now her name is on the home mortgage (I was never worried about her name on the deed as any divorce in PA it matters not rather she is on the deed or not....she is 50% owner from the marriage certificate in the laws eyes).

 

We almost have the apartment complex paid for and the day we do, the county courthouse will show her as the sole owner (I will sell her the property and 3 houses for $1 and have my name taken off of any deeds.) Same thing when once in the next few years we pay off the house we live in. I'll sell it to her for $1 and have my name removed. By the time I die, my estate, well there won't be an estate for me....LOL Only thing my name will be on is my one credit card...and my son's college education...oh yeah, and on our Chinese redbook marriage certificate. I look at myself as simply the guy whose two forms of uncle Sammy income helped my wife to be her own woman.

 

Car loans is another thing that can help. Just that little $200 secured card my wife had and the $1,000 bank loan that never got taken out of the bank, allowed me with my wife's credit history of monthly payments to take out loans in both of our names on two of our vehicles. Also, there are big box stores' credit cards. At first I could not get a CC from JCP or Macy's that were solely in my wife's name. Now she has both.

 

We are in the active stage of either building some townhouses on the 2 1/2 acres of land we got with the 3 houses my wife now rents out (it came with pre-approved building permits), or to buy other rental units for my wife's income....I know at this point she will need my name on the mortgages for loan income purposes. My goal is the day she no longer needs my income to buy anything....the day that I can list on mortgage applications, etc, that my profession is.....Home Maker

 

I did not know, as Credz pointed out that you could paying off any debt you put on a credit card IN FULL each time you bought something would help to build a credit score. I was still under the old timey notion that you made monthly payments, leaving a meager sum on the card each month as the way you built up a credit history. There are many months my wife doesn't buy anything on a card, but she makes payments on the $100 or so she keeps as a balance. With a 750 credit score that his wife has you certainly can't argue the point. My wife in her two years plus of credit history is at 710. GREAT JOB Mrs. Credzba.

 

Like Dennis advises, I taught my family to keep only a less than 15% balance of available credit on their cards. It will take a long time to build a good FICA score if you have a high percentage of debt to available credit on any cards, etc.

 

Good luck, it will take a year or so to build up any sort of FICA number, again as Dennis says, it takes time...use as many of the options you can at the same time. It will make the score rise quicker. Soon your wife will be getting 10 credit card offers a week in the mail. My wife is a one card type woman....and she has made sure that I am a one card guy too.

tsap seui

 

Chinese wives: Good Lord, if I had met my wife back in my 20's AND listened to her....I'd be a billionaire now....maybe even run for Prez of the United States.

[Allon]

Good one, tsap. Funny and sooooo true.

[L.G.]

Thank you all! Very helpful

[KevinNelson]

All answers so far are correct.

 

My wife has been here close to 15 years now and has not established credit. We bought our home and have refinanced it twice through Wells Fargo. As long as your wife does not show having bad credit, you can easily add her name to the trust deed.

 

The question is, how good is your credit? Lenders are very tight now - main points are debt to cash ratio, total assets and length of time having a credit history (the longer your good credit history the better).

 

The problem with this approach is that if she doesn't have any independent credit rating, what happens should you leave this world first? That was a problem my aunt ran into when my uncle died. She had no independent credit rating, so that made it very difficult at first to do anything, even though she owned a house and vehicles.

 

For my wife, the first thing we did after she got her social security card was to add her as an equal co-owner to a Visa card. We'll see how things develop from here.

Edited August 13, 2015 by KevinNelson (see edit history)