Helping someone establish US credit history and score. AU or Signer?

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mario1232000
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Location: San Francisco, CA

Helping someone establish US credit history and score. AU or Signer?

Postby mario1232000 » Sat Oct 20, 2012 1:07 pm

Hi everyone, I'm currently helping my Irish partner establish his US credit. He's been here a year so far and has a 12 month old Capital One Card and a 6 Month old Chase Freedom, both with low lines.

His CreditKarma score is 698, mostly due to the lack of credit history.

Would adding him on to any of my 6 or 7 year old credit lines as an AU help his score? What about adding him on as a joint signer?

We're trying to get an apartment here in San Francisco and a credit score below 700 makes it harder.

Thanks in advance!


kcarter609
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Location: VA

Postby kcarter609 » Sat Oct 20, 2012 3:22 pm

I've been told by people on the forum that yes, it does help, but when I called to ask Chase about adding my friend as an AU to help him build credit, they told me due to the CARD act it doesn't work like that anymore... So now I'm not sure.

Active Cards:
Chase Freedom 10+10 Visa Signature ($9k Limit - 8/2012)
Chase Sapphire Preferred ($10k Limit - 2/2013)
Chase Ink Plus ($7k Limit - 2/2013)
Discover IT ($9.5k Limit - 10/2012)
AMEX Zync (No Pre-set Limit - 1/2010)
AMEX Blue Cash Everyday ($20k Limit - 1/2013 - Backdate to 1/2010)

trumpet-205
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Postby trumpet-205 » Sat Oct 20, 2012 4:13 pm

I suggest you get the apartment in your name and work something out with your partner privately.

AU does very little to build credit. During a manual review AU will be excluded to evaluate creditworthiness. I don't recommend cosigner either because you will be responsible for the charges should your partner default..
In My Wallet:
Citi Forward (12/2010) | Citi TY Preferred (05/2011) | Chase Freedom (11/2011) | GECRB/PayPal (05/2012)
Discover it (07/2012) | AMEX BCP (09/2012) | TD/Target REDCard (10/2012) | Chase Ink Classic (11/2012)
BofA BBR (04/2013) | FNBO/Overstock.com (02/2014) | Barclaycard Arrival (04/2014) | FIA/Fidelity AMEX (04/2014)

DoingHomework
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Location: Arizona

Postby DoingHomework » Sat Oct 20, 2012 4:35 pm

A score of 698 after just a year is actually not bad. In terms of building credit he probably just needs to be patient and wait another year. But in the meantime I don't see anything wrong with adding him as an AU if you are committed and you trust him. It probably won't help him much in terms of establishing credit though.

kcarter609
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Postby kcarter609 » Sat Oct 20, 2012 5:54 pm

DoingHomework wrote:A score of 698 after just a year is actually not bad. In terms of building credit he probably just needs to be patient and wait another year. But in the meantime I don't see anything wrong with adding him as an AU if you are committed and you trust him. It probably won't help him much in terms of establishing credit though.


I had a 730 within 6 months of getting my first CC.

Active Cards:
Chase Freedom 10+10 Visa Signature ($9k Limit - 8/2012)
Chase Sapphire Preferred ($10k Limit - 2/2013)
Chase Ink Plus ($7k Limit - 2/2013)
Discover IT ($9.5k Limit - 10/2012)
AMEX Zync (No Pre-set Limit - 1/2010)
AMEX Blue Cash Everyday ($20k Limit - 1/2013 - Backdate to 1/2010)

trumpet-205
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Location: CA, USA

Postby trumpet-205 » Sat Oct 20, 2012 9:42 pm

It doesn't matter what score you have when you have thin file. Thin file is thin file.

You simply won't get the best term when you have thin file.
In My Wallet:
Citi Forward (12/2010) | Citi TY Preferred (05/2011) | Chase Freedom (11/2011) | GECRB/PayPal (05/2012)
Discover it (07/2012) | AMEX BCP (09/2012) | TD/Target REDCard (10/2012) | Chase Ink Classic (11/2012)
BofA BBR (04/2013) | FNBO/Overstock.com (02/2014) | Barclaycard Arrival (04/2014) | FIA/Fidelity AMEX (04/2014)

Daniel
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Location: US

Postby Daniel » Mon Oct 22, 2012 11:54 am

Trumpet brings up a good point about a thin file being something one will need to work around. I would like to add though, that your partner has about 18 payment months of credit history, an average account age of 9 months, and 2 hard inquiries in that time period. In general, most landlords look for negative items while doing a credit check because they are the easiest to spot predictors of poor renter behavior (source: I have two renters at a property of mine). I would wager a guess that you could get a place and have very little to explain if he has not missed payments yet on his two cards.

I would be cautious when considering adding an AU or cosigner to an account, but only you, your partner, and your financial adviser will know enough about your situation to be able to tell you if that is a good idea or not.

mario1232000
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Location: San Francisco, CA

Postby mario1232000 » Fri Nov 02, 2012 4:40 pm

Thanks for the help everyone. I don't think it'll be a problem for landlords, he has plenty of documentation and reference letters from previous landlords in the UK and a high paying job. I'm just not sure what else they look at.
It's just the thin file that always seems to get him denied for cards (He'd love a British Airways card, but is worried that Chase will deny him based on his lack of US history). I guess waiting it out is the best strategy here.

Thanks again!



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