Tracy Winters
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You where misinformed
I’m surprised at what they told you, because they are wrong. It’s called piggybacking and Fico recognizes it.
Fico has made some changes to how it deals with authorized users, but spouse, kids & parents that are authorized user do benefit from it. The card WILL appear on their credit report and WILL build good credit for them (See credit-piggybacking.html) for more information.
There is one fundamental difference between authorized user and secondary applicant. When adding someone as an authorized user, that someone doesn’t undergo credit check because he has no liability.
However, when you add someone as a second applicant (making the account a joint account) that person’s credit is checked. Most likely that you daughter won’t pass the credit check, not to mention that it’s not a good idea to have a joint account with your daughter.
Return to the credit card company and simply add her as an authorized user.
They Don’t
Unfortunately, pre-paid credit cards are not extension of credit. As such, they are not reported to the credit bureaus, and will not show up on your report.
According to the new regulations that were introduced on Feb 2010, you need to be 21 and employed at least 18 months (a part time jobs or minimum wage will not suffice) before you can get a regular credit card.
You have three choices to get a credit card:
- Have someone co-sign for you
- Take out a secured credit card that converts after a year or so to a regular card
- Have you parents add you as an authorized user to their credit card
Secured credit cards are easier to get than regular credit card, and they build credit just the same. After a year, you can ask your credit card company to convert it to a regular card.
See Establishing Credit History with Credit Cards for more information.
Several ways
Your credit score, credit report & credit history can affect your financial life in various ways:
- It determines if you get approved for a credit card, car loan, mortgage etc.
- Assuming you are approved – it determines your terms (i.e. the interest you pay.
- It determines the rates you pay on your insurance
- It can determine if you can get certain jobs
- It can determine if you can get a rental contract or a car lease agreement
- It can determine if you can get free phone or similar services
Hope this helps.
Both are “FAKKO” scores
Third party credit scores are only an estimate (See fakko-score.html). These scores are also known as “FAKKO scores”, fake scores or educational scores, and are practically useless.
The only place that sells “Real” Fico scores to consumers is myFico.com, and even they have few Fico versions, but you can get only a generic Fico score (called “Standard”). A single Fico check cost around $8.
Each of the 3 major credit bureaus also uses its own formula. They sell scores to lenders and consumers, and so they keep their formula to themselves and don’t share it with third party companies like FreeCreditScore.
My advice to you is to cancel the FreeCreditScore.com subscription. It’s really useless.
You can get your actual credit reports for free from AnnualCreditReport, and the score you get there is useless anyway (p.s. ever wondered why they are called FreeCreditScore but nothing there is free?…)The Capital One’s Credit Inform is certainly good enough, and you can get another free credit score service and free credit monitoring at CreditKarma. Both are free!
Re: credit bureau contact information
Following is the current contact credit bureau information for the 3 major credit bureaus. Please note that the credit bureaus update from time to time their contact information, so if you’re experiencing any problem simply go online (using the links provided) and continue from there.
Another important thing to note is that some credit bureaus use different phone numbers or contact information for general inquiries, credit report disputes, credit score purchase etc. For this reason I’ve also included a direct link to the credit bureau’s own contact page, where they keep their own up to date contact information.
Here is the contact credit bureau information:
Equifax
Website: http://www.equifax.com
Phone: 800-685-1111
Address: Equifax Credit Information Services, Inc.,
PO Box 740256, Atlanta, GA 30374Click here to go diretly to Equifax’s Contact Information Page.
Experian
Website: http://www.experian.com
Phone: 888-397-3742
Address: National ConsumerAssistance Center (NCAC),
PO Box 9556, Allen TX 75013Click here to go diretly to Experian’sContact Information Page.
TransUnion
Website: http://www.transunion.com
Phone: 800-888-4213
Address: Customer DisclosureCenter, TransUnion Consumer Relations,
PO Box 2000, Chester, PA 19022Click here to go directly to TransUnion’s Contact Information Page.
Theoretically – Yes. Practically – No
Theoretically, a 580 Fico score should suffice, but in practice you’ll need A Fico of at least 620, if not 640 to be approved.
Although a Fico score of 580 is considered acceptable for an FHA, the FHA plan is just an insurance plan for lenders. It’s very difficult, if not impossible to actually find a lender willing to give you a loan with that score, and I’ve been hearing lately that actual approvals are now even higher, in the 640 area.
You need to keep in mind that credit scores are not everything. Credit reports play a big role, if not bigger than the scores themselves. If you do find a lender that is willing to approve you with your score, you will need to have a clean credit reports, with all derogatory items resolved!
You will also need to demonstrate:
- Minimum of 2 years stable work history
- Self resources to pay a significant down payment
- Low debt to income ratio
- Additional resources to pay closing costs
.
Hope this helps 🙂
It will raise your Fico score
What’s bad for your score is to carrying the balance from one month to the other.
As long as you pay the balance in full every month, it will build your score and increase your Fico.
Don’t let the maximum 35% utilization stuff confuse you. What kills credit scores is carrying a balance, not utilization.In fact, if you continue to almost max out the card and pay it in full every month, the credit card company is likely to increase your limit. It’s the fastest way to get a limit increase.
You probably already have a very bad credit score
You may not be aware of it, but you have already established credit. Only problem is that you have established BAD credit.
The unpaid bills that went to collection agencies WILL find their way onto your credit report – and are bound to have an adverse affect on your credit score. You can expect to have a very bad score for the next two years. After that time it will start to improve, but will still be much below average.
You should be concerned because of two reasons:
First – These collection accounts will remain there for 7.5 years, so you’re looking at a very long time with poor credit score and everything that follows: You won’t be able to get loans, credit cards, you may also experience trouble renting a home. Your insurance rate will not be favorable etc.
Second – Even the unpaid bills that DIDNOT go to collection are affecting you at this very minute. For people with thin or no credit history (i.e. yourself) Fair Isaac has developed a new credit score – FICO Expansion Score.
This score is very different from the standard FICO score. Because it cannot use conventional credit history (which you lack), it uses unconventional sources like… utility bills, cellular bills, medical bills… installment purchase plans etc.
You as a consumer have no access to this score, but you can be pretty sure that your unpaid utility bills have already havocked it.
Re: Credit fast repair
It would take an act of God to get your score to 650 in 3 months. Even if you could do it – no one will lend you money with the kind of debt and collection you have.
You’ve probably been screened for mailing lists
Did you receive any pre-approved credit card or loan offers last year? I bet that you did, and all these inquiries aren’t hard inquiries.
The FACT Act gives the credit bureaus permission to sell your credit information to credit lending companies, which screen potential clients and put them on mailing lists. When any of these lending companies pull your credit file, it generated a credit inquiry.
However, as per the FACT Act these inquiries are considered as (Soft Inquiries) and have zero effect on your credit score. Although they appear on your file, they are not considered by the Fico formula because they were NOT caused by your search for new credit.
You have the right to exclude yourself from receiving such pre-approved mailing offers. You can ask the 3 major credit bureaus to exclude your name from lists for pre-approved, unsolicited credit and insurance offers by calling 1-888-5-OPT OUT (1–888–567–8688).
Another option (not likely, but you can’t be too sure) is that your identity has been stolen and someone is trying to apply for credit in your name. To make sure – contact a few of the companies (you should have contact information for each of them in the Contact Information Section) and inquire whether they screened you, or did someone actually applied for credit with your information.
In the rare event that your identity had been stolen, follow this link for more information.
Missed or late?
It depends on how much time has passed. If you missed the due date but have made the payments a week later – no problem. If won’t show on your credit report.
It only shows up on your credit report if it is at least 30 days late. Once it shows up – it will lower your credit score. And because it’s 3 different late payments I’d say it’s at lease a 100 points.
He can’t have a credit score until he’s of legal age
Theoretically, adding your son as an authorized user to your existing credit card should do the trick. The account would appear on his credit report and would count in his Fico score.
However, the credit bureaus do no knowingly maintain minors’ credit files, so most chances he would not have a score at all until he turns 18. Also, they are not allowed to provide his credit report to you, and as a minor he doesn’t have access to any credit bureau’s data base.
Teaching your kid about money is very smart. I think that all parents needs to do it these days. Teaching him about credit cards and responsibility is even smarter, and should translate into good credit when he’s on his own.
I know that many people won’t agree with you and will argue that you need to teach his to save rather than to use credit. It may be true. But the alternative of him encountering credit for the first time at 18 or 20 is, at least in my eyes – worse.
He’d better learn about credit from you, and not by making mistakes on his own and ruining his credit while in the process.
If you’re interested here’s a good article on teen money management.
These are the best no credit history credit cards
You are correct. You have slim chance to get a “regular” credit card without first having a good credit history.
Your best bet is to get a secured card with Capital One or US Bank and use it sparingly for a year or so. After that, assuming that you’ve made all payment on time, your credit history should be good enough to get a regular credit card.
Secured card are easier to get because in order to get one you need to make a deposit which the bank freezes. That deposit is the bank’s collateral in case that you default. When you close the account or switch to an unsecured card – they unfreeze you deposit and return it to you.
Capital One Secured Credit Card has a minimum opening deposit of $200. That means that your credit limit will also be $200.
US Bank’s Secured Credit Card has a minimum deposit of $300. US Bank is very well known to unsecure as early as 13 months, and they have reward options for their secured cards (such as flier miles, Harley Davidson points, etc).
Another favorite is the USAA Amex Secured, BUT it doesn’t unsecure to a regular AMEX and doesn’t help “open doors” with Amex either.
On all three cards you can deposit MORE than the minimum amount, if you find that the minimum is too low for you.
Just make sure you follow these rules:
- Don’t pay before the statements arrive. Doing so will not build your credit.
- Always pay the statements before the due date. Pay them in full so that you avoid unnecessary interest payments.
- Don’t use more than 35% of the card’s limit. Using more will lower your score.
See building-credit-history.html for more information.
Good Luck
Get a secured credit card
A co-signer with bad credit is worse than no co-signer. You will just have to find a place that will accept you and with no credit history. Your best chance is a secured credit card. After a year you can convert it to a normal credit card. See this for more information.
Re: Why pay off debt if it doesn’t fix my credit score
I can think of many reasons why you SHOULD pay:
First, there is the moral issue. If you can repay a debt that you promised and you choose not to – that’s stealing.
Second, paying your debts will stop collectors from calling and harassing you.
Third, Paying off your debts will prevent collectors from suing you, getting a judgment, and garnishing your wages, attaching bank accounts, and placing liens on property.
Forth, from a practical point of view it’s much better to show a debt paid late rather than an open collection item. Remember that most lenders and creditors actually check your credit report, and they will have a more favorable attitude toward late-but-paid debts than to unpaid debts.
