Building Credit History Independent of Spouse?

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Midori
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Building Credit History Independent of Spouse?

Postby Midori » Tue Oct 30, 2012 2:02 pm

Married for 12 years. Left my career to be a stay-at-home-mom for the last three.

When we got married, DH had been independent for a few years already, and had a ton of credit cards. I just piggybacked onto his and thought nothing of it. Currently, we're jointly down to two cards-- $20k Chase Freedom, $20k BofA WorldPoints. He canceled all his other cards long ago. We last ran our credit history in October 2011, and each of us was north of 800 according to all three agencies.

We have some rental properties in an LLC under my name (LLC passed its 3-year mark), and I'm about to do some renovations, where I'll probably be spending about $10k between now and the end of the year at different hardware/home improvement stores. (Paint, flooring, appliances, etc.) I noticed the 5% discount you'd get if you applied for a store card (GECRB), and applied, with myself as the guarantor, although they said it was okay to list our joint household income. However, I got rejected for insufficient credit history.

I tried a few different things-- checked with my military credit union (only did loans, no cards to help build credit history)-- and ultimately signed up for a Capital One Cash Rewards card. Got a $2k limit there, which was nice. Will arrive in the mail this week.

So that's my back history-- how do I need to act financially for the next year or two as I build my credit history? Is there anything I'm about to do that will jeopardize my credit score? With the joint cards, we generally keep spending at about 10%, and we pay it off in full every month. With the business, I always used the debit card, but I'm wanting to work my way up to getting some sort of return on the $$ we spend. And then there's my personal credit history that I want to establish-- if something ever happens to DH, I want to be in a good position for myself and the kids. And, of course, it's all complicated by the fact that I don't exactly have an independent income of note at this point. (Thank you, CARD act.)

Do I need to suck it up, continue to use my debit card for the bulk of my purchases, not worry about reward points or cashback, and just use my new CapitalOne card for the occasional bucket of paint?

Is it okay if I, say, spend $1200-1500 on a $2k card for two or three months, pay it in full each month, and then ease off my spending after my renovations are complete?

I have no plans on applying for any new cards anytime soon... I'm happy to keep making payments on what I have for at least the next 12 months. No plans for loans, mortgages, new phones, or anything that would require a credit check.

Any advice is appreciated.


Money card
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Postby Money card » Sun Nov 04, 2012 12:31 am

I would use that capital1 cash back card over your debit card. hopefuly you have your own checking account. pay in full and on time.

cashback
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Postby cashback » Sun Nov 04, 2012 12:41 am

1.) If you are a joint account holder on the two credit cards with your husband, they should be on your credit report as well. I'd get another credit report and see if they show up on yours.

2.) Creditors like to see less than 25% debt to credit ratio. Spending $1500 on a $2000 CL card would put you at 75%. There is a way around that though. Just pay the balance about a week prior to the closing date of the billing cycle so that the balance reported to the credit bureaus is $0. If your credit report shows the two other credit cards on it, then don't worry about it as you would have a total CL north of $40k.

3.) From what you have posted. I couldn't imagine why you have a lack of credit history. Only thing I can suggest is pay the bills and let the credit card age.
Credit Cards
Amex BCE 25K ---- PenFed Platinum Rewards 15.5K --- US Bank Cash+ 12K --- Discover IT 6K --- Citi Dividend 5K --- Chase Freedom 12.5K --- Amex SPG 6K --- Citi Thank You Preferred 15K

Not Used
Citi Simplicity - 5K, Sam's Club Discover - 10K

Future Cards
Sallie Mae World Mastercard

FICOs
Exp 772 - TU 781 - Equ 781

Midori
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Postby Midori » Tue Nov 06, 2012 3:33 pm

Thanks for the excellent advice. :o)

MoneyCard, I'd closed out my personal checking accounts several years ago, but savings is still in my name only.

I went and looked at my free annual credit report from annualcreditreport.com. Experian and I didn't agree on an answer to one of the identity-establishing questions, so I'll have to write to them for their info.

Equifax was interesting-- they told me I didn't have a mortgage, and that I used 0% of my $21K credit limit (10-15% is more of the norm for that account, paid off each month), although my "newest account" was the mortgage holder for my 2010 mortgage, which was shown as being paid off-- but it had reverted back to the original issuing bank about a year ago.

I really liked the TransUnion page... they showed my student loan debt as being paid off, etc, and pages of happy-looking boxes showing years and years of excellent payment history.

It was helpful to see that I was a joint user on the Chase Freedom card (which gives me 11 years of history), but it looks like I'm only an authorized user on the WorldPoints card. (Tried hinting that we need to change that... looks like I need to ask outright.)

Knowing that I won't keep a CapitalOne card with its fees for too long, I couldn't resist trying to pick up a second card.

Since asking my federal credit union for a card was a wash, I tried calling USAA to see if my 15 years of auto insurance history and 12 years of renters/homeowner's insurance history with them counted for anything and would help me get one of their credit cards more easily. (No dice.)

Popped by the desk at my local Citibank, to chat about the situation and see what they recommended for someone in my circumstances. She gave me three cards to choose from (ThankYou, Dividend, Simplicity.) I didn't think I had much shot at any of them at this point, but whatever... if my banking with them counted for anything, I'd give it a try. I filled out the form for the Citi ThankYou and brought it back to her desk, and she submitted it while we sat together. (Surely they have a discreet little radio button to toggle that says "Client is full of awesomeness and comes here all the time; issue her a card!") However, checking my credit report, I didn't see any hits from Citibank within 24 hrs of her having submitted the application, so... who knows. I did get a pile of print-outs preapproving me for all sorts of loans... seems like everyone wants to throw a loan at me every time I ask for a card. :o)

So... overall, I'm pleased that my credit history isn't as much of a blank slate as I had thought it would be from getting rejected for something as basic as a store card. Will be more cognizant of getting myself established independently over the next few years. Will get myself put on as joint for the WorldPoints card, which should give me additional time in my own credit history. Will work with the CapitalOne card, see what happens with the Citi ThankYou, revisit the situation this time next year, and take it from there.

Thanks for the advice and helpfulness. :o)



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