Wife establishing/building credit

Discussion in 'General Discussion | Credit Cards' started by MaxSalvo, Mar 6, 2013.  |  Print Topic

  1. MaxSalvo

    MaxSalvo Member

    Messages:
    8
    Likes Received:
    12
    Status Points:
    45
    I was hoping for a little advice for my wife. She came to this country a few years ago and had absolutely no credit (good or bad). About 7 months ago she applied for a Chase United card and was turned down due to lack of credit history. I set up a secured visa through our local credit union that is tied to $4000. She has used the card and paid the entire balance each month. It has been about 6 1/2 months now and Credit Sesame is reporting her credit score at 790 (not sure why). Discover has now started sending her offers in the last few weeks.

    My question. Now that she has established enough credit that Discover is sending her applications, should she go ahead and try to get the Discover card or should she try for another card that actually gives her some points? If another card can you make suggestions and explain why that card might be best? She would like to get something that could be used for air travel. Her salary is currently at about 24k a year and she has no loans or debt.

    Thanks for any information or suggestion you can provide.
     
    Sweet Willie likes this.
  2. edekba

    edekba Gold Member

    Messages:
    3,462
    Likes Received:
    3,783
    Status Points:
    2,145
    GoodBoy and Sweet Willie like this.
  3. Sweet Willie
    Original Member

    Sweet Willie Gold Member

    Messages:
    4,048
    Likes Received:
    8,739
    Status Points:
    7,270
    You may know this, you may not, paying the entire balance each month does not increase one's credit worthiness vrs someone who pays on time & has a balance. One would think paying off each month would increase score but it doesn't, one needs to pay on time & manage any credit balance (not let it get too great a %). This is ~2/3 of one's credit score.

    790 (if inline with a 790 FICO) should be good enough for most any card, unless she is not employed.
     
    GoodBoy and boondr like this.
  4. boondr

    boondr Gold Member

    Messages:
    1,272
    Likes Received:
    2,732
    Status Points:
    1,425
    Isn't this largely because the credit bureaus don't differentiate between new balance and carry-over?

    IE: Person A has a $2500 balance month 1, pays $100 and gets charged $25 interest, new balance reported month 2 as $2425

    Person B has a $2500 balance month 1, pays $2500 and charges $2425, accrues no interest, balance reported month 2 as $2425.

    Don't the credit bureaus see both A and B as identical, everything else being equal?
     
    GoodBoy and Sweet Willie like this.
  5. ccyff

    ccyff Active Member

    Messages:
    5
    Likes Received:
    2
    Status Points:
    65
    If you trust your wife, simply add her as an authorized user on your oldest credit card. In that way your wife will have longer history and more likely to be approved.
     
    wrxmom and Sweet Willie like this.
  6. Sweet Willie
    Original Member

    Sweet Willie Gold Member

    Messages:
    4,048
    Likes Received:
    8,739
    Status Points:
    7,270
    it is not the credit bureaus, it would be the FICO score (which is not owned by the bureaus, FICO is based off of the bureau info). Your logic sounds good enough (doesn't take into considertion overall credit utilization %), I wouldn't pretend to know exacts w/FICO just generalizations that they have published.
    This approach is not near effective as it used to be. Too many consumers were arranging to be authorized users on accounts to create higher false scores, so FICO & other scoring companys have adjusted the weighting of an authorized 2nd user.
     
    GoodBoy likes this.
  7. HaveMilesWillTravel
    Original Member

    HaveMilesWillTravel Gold Member

    Messages:
    12,504
    Likes Received:
    20,199
    Status Points:
    16,520
    Does it even work, given that card companies seem willing to issue AU cards for cats and dogs as long as they have a DoB and name?
     
    GoodBoy likes this.
  8. emtesenair

    emtesenair Silver Member

    Messages:
    73
    Likes Received:
    110
    Status Points:
    325
    I agree. My wife was an authorized user on most of my acocunts and her scores wasn't effected. It wasn't until she opened new cards in her name that her score started to increase.
     
    Sweet Willie and GoodBoy like this.
  9. edekba

    edekba Gold Member

    Messages:
    3,462
    Likes Received:
    3,783
    Status Points:
    2,145
    CRA yes I think; but w/each individual lender no.
     
    GoodBoy likes this.
  10. MaxSalvo

    MaxSalvo Member

    Messages:
    8
    Likes Received:
    12
    Status Points:
    45
    Thanks for all of the comments but only one person has answered the question that I originally asked. edekba suggested the Chase Freedom and explained why. Does anyone else have a different opinion or should I go ahead and have her apply for the Freedom?
     
    GoodBoy likes this.
  11. edekba

    edekba Gold Member

    Messages:
    3,462
    Likes Received:
    3,783
    Status Points:
    2,145
    IMO Freedom is the best "starter" card you can get. Especially if you have a CSP/Ink Bold that you guys can combine & transfer to UA.

    If the person in question didn't have some way to xfer; then possibly the Capital One Cash card (1% back + 50% bonus on the cash back) would probably be better ... especially since it has no FOREX fee.
     
    GoodBoy likes this.
  12. chemist562
    Original Member

    chemist562 In Memorian

    Messages:
    210
    Likes Received:
    151
    Status Points:
    385
    I would second applying for the Chase forward card. The problem with Capital One is they pull all three credit bureaus. I had my wife add me as an AU on two of her ancient cards (Macy's/Penny's opened in 1984 & 1985) and with my very thick credit file, my scores raised about 20 pts. That was after a major aporama (after 3 mortgage refi's plus 3 new credit card accounts). It increased my average age of accounts. I believe it would only work with a spouse with the same address.

    If the OP has an old AMEX card, add your wife as an AU. (or apply for a starter AMEX card in her own name--any new AMEX cards will have member date as of the first application. I would defer to the other posters on which AMEXcard would have the highest approval potential).
     
  13. rlx01

    rlx01 New Member

    Messages:
    2
    Likes Received:
    2
    Status Points:
    15
    Hi OP,

    I went through the same steps as your wife (high limit secured CC at a CU, CS score that looked high, optimizing reported util to 1%, etc).

    I basically ran a bunch of tests on who'd approve me with a decent EX FICO (~760 at time of first application) and a 6 month credit history (I app'ed as soon as CS showed a score).

    FWIW:

    1. Approved for PRG (using the 50k MR bonus for 1k spend offer -- expires tomorrow so get in soon).
    2. Approved for SPG within 1 minute of PRG approval.
    3. Denied Chase CSP (insufficient credit history).
    4. Denied Citi AA (insufficient credit history).

    My income is high. I believe AMEX bases their approval on a bunch of factors, but I think income and total spend/month on your reporting cards (I don't mean util, my CU CC reports how much money I put through the card every month, even when it reports a $0 or $20 or whatever balance) are the major factors when you have a very short/thin file. I don't have a banking relationship with either Chase or Citi (because my CU rocks).

    AMEX pulled EX and TU for me. But they only needed 1HP for 2 cards. That's a lot of value out of 1HP. :)

    IMHO, your wife should stick with AMEX for the next 6 months and then attempt Chase/Citi. Remember to 3xCLI the AMEX revolver in 61 days. Good luck!

    (I forgot to mention, the reason for PRG first and SPG second is because the underwriting criteria for revolvers is higher than the charge cards. But a denial at AMEX is a SP only if you're already a member. Of course, YMMV.)
     
    edekba likes this.
  14. edekba

    edekba Gold Member

    Messages:
    3,462
    Likes Received:
    3,783
    Status Points:
    2,145
    technically that's 2 HP ;)
     
  15. rlx01

    rlx01 New Member

    Messages:
    2
    Likes Received:
    2
    Status Points:
    15
    True, but if I had a longer history/thicker file it would've probably only been an EX pull. They pulled EX and TU for the first app. No pulls for the second app. :) Might depend on location, etc, too.

    I only really care about EX since every lender pulls that in CA. :D
     
    edekba likes this.
  16. tim0thy

    tim0thy Active Member

    Messages:
    9
    Likes Received:
    5
    Status Points:
    75
    I was in a similar situation a few years ago.

    For me Chase was the hardest to get approved for at first. I finally got in through the Chase Freedom card, built a relationship with them, and two years later am getting approved for Southwest Plus Visa, Priority Club Visa, etc. I do think that the Chase Freedom card is somewhat easy to get so I would re-apply.

    But, two years ago I was also able to get the AMEX PRG card so I think that this one is pretty easy to get, plus you'll get points for it.

    I also got into Navy Federal Credit Union two years ago and gained high limits on two of their credit cards which helped my debt to credit ratio a lot. I highly recommend NFCU to build your credit score.

    Hope this helps!
     
  17. Muerl
    Original Member

    Muerl Gold Member

    Messages:
    1,253
    Likes Received:
    2,656
    Status Points:
    1,445
    I second what they said. Freedom is a very good "get in the door" card for chase.
     

Share This Page