Have one year to build credit and don't know what we're doing

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mrsjperez
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Have one year to build credit and don't know what we're doing

Postby mrsjperez » Tue Apr 14, 2015 2:22 pm

My husband and I are trying to build credit within a year to get a house.

I can't log into credit karma or annual credit report or any of those sites because there's different names and addresses with the 3 agencies and I don't know how to find out what the have or how to change them.

We went to the bank but they would only talk to my husband because I recently changed jobs. We told them about how he doesn't have any credit and they said they could use alternative credit but they just guessed we could possibly asked a $50,000 house and told us to look for one in that range. They refused to give a pre approval unless we put a contract on a house first but without knowing how much we can actually get we don't want to put a contract on a house and then find out we could get much better and be stuck. Plus no real estate agent will even talk to us and no foreclosure banks will talk to us either so we decided to get credit cards and build for a year and save cash to get something better.

I was approved for a capital one unsecured card and he was approved for a semi secured capital one cash back card. Only thing is, now we don't know what to do when we get them. I don't know why I even applied since I was told 1 year on my job wouldn't be enough for them to accept me. Does capital one report your credit limit as well as balance? I was told by friends that they don't and it's a terrible card to have. Now I'm scared.

The bank audio told us to "go finance something". They have example of furniture to bills credit since my husband only has one card now and they said we needed three.

We have the opportunity to live with family to save on rent and bills so we'll have a lot more money for a house in a year but is one year really enough? Should we stay where we are to have bills in his name to use the alternative credit. Do we have to "go buy something or a couple things"? Should I even bother with my card since they won't advertise me anyways. My husband and I have lived debt free for 25 and 29 years but apparently that's a bad thing.

Any advice on the capital one cards being good and reporting everything we need(we were told my realtor to make sure we had a card that reported frequently and reported limit as ell as babble to show our ratio). Would we have enough credit built in 1 year with 1 card and financing a couch or something or should we just stay where we are and use our bills as credit proof? Sorry post so long.

We have no ideas what we're doing. Never thought not being in debt and not having to use cards and paying everything cash on time would actually screw us over. Where we're living now or if we move with family we still only have 1 year living time. Plus it is ridiculous that we're paying more for rent than we would probably would(based on bank lenders estimate numbers) be paying to own our own home.

Thanks for any help y'all can give.


JamesMS
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Postby JamesMS » Tue Apr 14, 2015 2:53 pm

Ok, here are my thoughts on what you have said in your post.

Capital One - I know that the unsecured card will report both limit and balance to all 3 credit bureaus. However, I am not sure if the unsecured card will do the same. Since you have the unsecured card, you might want to add your husband as an authorized user to your account (that should report on his credit as well).

Other Credit Lines - I believe that only having 1 line of credit will help but not greatly. If I had to guess, I would say that your unsecured card probably has a low limit. If you are going to use the card regularly and wait for the bill to come in to pay, this will hurt your utilization percentage. My advice, use the card and make weekly payments based on what you charged. This way when your bill is ready it will either show $0 due or very little. If y'all can get a few lines of credit established that would be ideal. As part of your score will be based on how many and the types of credit you have. Also, make sure that all payments are made promptly.

Mortgage - In my opinion, 1 year will probably not be enough time to establish both you and your husband's credit enough to get approval, but I could be wrong. Some of it will also depend on your previous 3 years tax returns, how much you currently make and what monthly expenditures that show up on your credit.

One of your statements is half true and half false. Living debt free is not necessarily a bad thing, but living debt free without credit is.

I wish you good luck.
Main Cards:
Amex BCE
Amex Everyday
Bank of America Cash Rewards
Chase Freedom
Capital One Quicksilver
Citi Thank You Preferred

Spark Cash Back (Business), Amex Plum (Business)

mrsjperez
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Postby mrsjperez » Tue Apr 14, 2015 4:42 pm

My unsecured limit is $1000. His is $500 with $99 security deposit. I got him put in mine as an authorized user even though the bank said it was a waste and he did the same for me on his.

Should we go"buy something" like furniture? We are going to put our stuff in storage if is decided it would be better to live with family so we could put it in there as well. Still not sure which way is better. Moving auth family and having no bills except credit or staying here and saving minimal but having bills in our name for alternative credit.

JamesMS
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Postby JamesMS » Tue Apr 14, 2015 6:22 pm

mrsjperez wrote:My unsecured limit is $1000. His is $500 with $99 security deposit. I got him put in mine as an authorized user even though the bank said it was a waste and he did the same for me on his.

Should we go"buy something" like furniture? We are going to put our stuff in storage if is decided it would be better to live with family so we could put it in there as well. Still not sure which way is better. Moving auth family and having no bills except credit or staying here and saving minimal but having bills in our name for alternative credit.


It would be best, in my opinion, to stay put for a while and build both of your credit. Then when you have established credit, think about purchasing a house. If you wait a while and build your credit, you should also receive a better apr on your mortgage.

In regards to building credit, there is not just one way of doing it. Now that you have the Cap 1 card, charge a few small purchases and pay the card off when you get the bill. Do it again, by the second or third month of doing this it will start improving your credit by showing activity and payments. Then try to get another credit line (either card or through a furniture store). It is always best to have multiple lines of credit available to you. After 6 months of having this card open, log into Cap 1 and ask for a CLI, doing it online will not show a hard pull on your credit. Remember, keep your utilization as low as possible if not paying off your card before the bill. This will show a low utilization which will also help your credit. Your goal should be to get at least 3 to 5 open lines of credit. By doing this, it will show that lenders are willing to extend credit to you and your husband.

I hope this helps you out. If you have any other questions please feel free to ask.
Main Cards:
Amex BCE
Amex Everyday
Bank of America Cash Rewards
Chase Freedom
Capital One Quicksilver
Citi Thank You Preferred

Spark Cash Back (Business), Amex Plum (Business)

MemberSince99
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Postby MemberSince99 » Wed Apr 15, 2015 9:13 am

I would say as far as "go buy something" like furniture, do this IF you can pay it in full in 6 months or so (and have it paid by the time you would go for a mortgage) and IF you would not be financially stretched to do it and IF it's something you would use and bring to the new home anyway. Like one sofa for example if you need a new one anyway, or a bed.


This will give you installment history and provided you pay it off like in 6 months it will report that you have installment history and paid with no debt oustanding by the time you go for your mortgage.


Don't over extend yourselves to do this or you just set yourselves back.


As far as Cap One, are they lousy? Yeah their customer service is a bunch of script readers who you will have trouble understanding, but it will build your credit and frankly for starting out you could do FAR worse. They aren't that bad so don't worry about it. Just treat the cards well.


A year might be aggressive but I've been reading lenders are starting to loosen up a bit so it's possible. You never know until you try. I say go for it - if a year doesn't work 2 should if you do it right. Just hang in there. After Cap One has been reporting for 6 months on your credit reports you could go for a better card if you want to (one that has rewards, a higher limit, etc). Not necessary though. The Cap One cards will build your score and your history.

mrsjperez
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Postby mrsjperez » Wed Apr 15, 2015 1:39 pm

We could buy a couch or something if we live with family but if we stay here and plan to use alternative credit then it would be pretty tight.

The loan officer told us that they would use either alternative or regular credit but not both together. Is that correct? We were very unhappy with our service that day and the fact that they couldn't answer any questions.

The woman who was"helping us" contact the loan officer actually told us before she placed the call that it wasn't going to get us anywhere and it was a waste of time. She's also the one who said adding each other as authorized users wasn't important and it would only mean the spouse could pay the bill also. No matter what we aren't going back there for a Home loan. We plan to use not more that 10% of or cards and have cash immediately to put for the bill. Wait until we get our statement then immediately pay before the due date. From what I understand that would indicate we're using our cards but we pay them off without paying interest. Still don't know if we should stay here and use our utility bills as credit or move and focus on the actual credit cards. If the cards would be enough in a year then moving is ideal because we could at least double or triple our bank accounts to go towards down payments.

mrsjperez
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Postby mrsjperez » Wed Apr 15, 2015 1:52 pm

Not sure if I need a new thread for this but I have one other concern. I tried to get my credit scores because the woman at the bank said I had to have something for them to straight out give me $1000 unsecured but non of the websites could verify my identity. Turns out experian had my maiden name(been married 2 times so not sure how they only have that) and they have an address I recently found out is my ex mother in laws house that I have never lived at. Now I'm not sure what's going on there and I don't know how to find it what the other 2 sites have. Experian said to mail copy of ssc and 2 bills with correct name and address to fix their info but what about the other 2?

MemberSince99
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Postby MemberSince99 » Wed Apr 15, 2015 5:50 pm

You'll have to contact the other two as well as Experian. You want to do this because any mortgage lender will pull all three of them.


What do they consider "alternative" credit? A normal furniture installment loan is "normal" credit in my view. I should think a good payment history on it would be a positive thing.

JamesMS
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Postby JamesMS » Wed Apr 15, 2015 7:46 pm

What did the banker mean be "alternative credit"? I honestly have never heard that come out of a bankers mouth. I will call my banker tomorrow, which is also the president of the bank, and ask him if he has ever heard anyone say this before. To me, credit is credit, it doesn't matter if it is credit cards, personal loans, store cards or loans for furniture. If it is on your credit then is "CREDIT".

When it comes to moving or staying put for a while, that is something only you can decide. Do what is best for y'all.

As membersince99 stated, you will have to call the other bureaus to find out what information they have on file. If it is incorrect, do whatever you need to so that it gets updated.
Main Cards:
Amex BCE
Amex Everyday
Bank of America Cash Rewards
Chase Freedom
Capital One Quicksilver
Citi Thank You Preferred

Spark Cash Back (Business), Amex Plum (Business)

whit
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Postby whit » Wed Apr 15, 2015 8:21 pm

Lending club
Opportunity fund


Also mortgages can be done at a higher rate with private loans--usually done with title company as middle man and a person will fund the mortgage with their own $$$$



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