How to quickly build my fiance's non-existent credit history

April 23, 2012 2:14 PM

My fiance has no credit. We're getting married in 2 months. How do I build her credit quickly? I have good credit.

My fiance came to the states four years ago as a student but she's never had a credit card, phone, utilities or anything in her name so her credit is pretty much non-existent. She's always used debit cards/cash.

We're getting married in two months and I'd like to build her credit soon. She doesn't work right now and possibly won't till the end of the year but I'd like to get started building her credit so we have some options when we try to get a house or don't have problems when I try to get her a card. We tried opening an INGDirect checking a/c for her the other day and got declined since they want some credit history to get her overdraft protection or so.

I've looked at [1, 2] but those seem to cater to single people. I was wondering if I could do something to take advantage of the situation that I have good credit.

I read about piggybacking where I add her as a joint/authorized user on my accounts but the consensus on the Internet is that it doesn't help anymore.

My credit score is in the mid 700s and I never get declined for credit or so.
- Should I add her to my auto loan? It has ~3k left on it and expires end of this year. Will that change the interest rate?
- Should I add her to my credit cards? (visa/amex - 4+ years of ontime payments). I pay in full so I'm not worried about the interest rate jacking up.
- Should I look at getting her a secured/unsecured credit card with a low credit limit for sometime?

I can't get her an account in my credit union as she won't be living in my area for atleast two months till we get married.

Thank you!

posted by bbyboi to Work & Money (13 answers total)

I don't understand. Does she need credit approval before she can marry you?
posted by Nomyte at 2:19 PM on April 23, 2012 [4 favorites]

Response by poster: No she doesn't. I just want to get started building her credit as early as possible (even before we get married) - we might look at buying a house next year so we want to get started sooner rather than later. Thanks :)
posted by bbyboi at 2:21 PM on April 23, 2012

So what builds good credit is payment history, and amount of credit available to you. Like your fiancee, when I was a student I did not have a credit card. I didn't want to put myself in a position where I could get in trouble. When I decided I needed to build credit, I applied for a 'regular' credit card and said 'yes' to all those store credit cards you get offered. Then I tucked the 'regular' card in my wallet, used it sparingly, and paid it off every month. The store cards just got cut up immediately, but they were still on my credit history and good credit because I didn't have any late payments but I had lots of credit available to me.

YMMV, of course, but it got my credit from nothing to mid 700's pretty quickly and easily.
posted by Concolora at 2:22 PM on April 23, 2012 [1 favorite]

Best answer: I'm not sure it's correct that adding her as a joint/authorized user is unhelpful. This answer from Experian, one of the three major credit reporting agencies, suggests that it can help. If you trust her completely with your money, I would add her as an authorized user. It won't hurt her credit, and it's likely to help, at least somewhat.

And yes, she should get a secured card (or unsecured card if possible) with the highest limit that she can, and pay it on time every month. This will build her credit history.
posted by insectosaurus at 2:24 PM on April 23, 2012

If you're buying a home and you are the primary earner and top name on the mortgage, does the spouse's credit rating matter?
posted by JoeZydeco at 2:32 PM on April 23, 2012

If you're buying a home and you are the primary earner and top name on the mortgage, does the spouse's credit rating matter?

If two people are going to be listed on the mortgage then you need to provide credit ratings, income, savings, recent work history, etc., for both, regardless of their relationship. Similar issue came up when my brother and I tried to buy a rental property together a while back.

The short answer is, if you are the one with credit, you should be the one buying the house. If she does in fact work and can pitch in for the payments, more's the better, but she doesn't have to apply for the loan. If you want more details, maybe start talking to a mortgage broker NOW, before you ever have a particular house in mind, and he / she can give you advice on what is actually important on getting approved for a loan.
posted by Joey Buttafoucault at 2:37 PM on April 23, 2012 [1 favorite]

Echoing what Joey says above. If you have high enough income, you can get the mortgage only in your name. If her credit score is much lower than yours, that might be a better option.

If your wife is still a student (it sounds like she might be), she should take advantage of that to get a student card. Typically student cards are easier to get and offer higher starting credit limits than traditional cards for people with no credit history, and they will never ask you about student status after the original sign up. Once she has some credit history and wants a higher credit limit, it would make sense to get a non-student credit card.
posted by asphericalcow at 2:43 PM on April 23, 2012

In order to rebuild my credit score, I got a store card through Amazon, which you can only use at Amazon. I have a subscribe and save for cat litter/food, which is pretty much the only thing I use it for, and pay it off every month.
posted by spunweb at 3:28 PM on April 23, 2012 [1 favorite]

The way I understand it, you can have someone else listed on a loan even if the bank is predicating its credit decision solely on your income and assets. In a sense, the bank can view her as kind of a bonus. It isn't going to give out a loan that you can't afford by yourself, and hey, here's this other person who 1) might pitch in from time to time, and 2) we can go after if things go south.

But really, I think you're putting the cart before the horse. Your goal here is not to build her credit rating as such, it's to make sure you can get a mortgage. Her having a good credit score would be nice, but as you don't technically need her to have a loan in her own name, all you really need to do is figure out what effect, if any, her credit score or the lack thereof is going to have on your mortgage application. To do that, talk to your bank. You don't actually have to apply right now, but a brief conversation with a loan officer will let you know how this thing is going to go down.
posted by valkyryn at 4:32 PM on April 23, 2012 [1 favorite]

This is anecdotal, but I wanted to note that store cards, and any cards, can get closed for lack of usage. I applied for an Express store card, and got one -- I hadn't realized I had applied for a credit card at the time (in retrospect, I'm lucky that nothing worse happened to me in my state of financial illiteracy) and after two purchases, never used it again. Subsequently after a long period of time -- a year, maybe? -- the card was closed.
posted by andrewesque at 4:45 PM on April 23, 2012

If you decide that a secured credit card is the way to go, there was a recent AskMe about finding a good one.
posted by Houstonian at 4:00 AM on April 24, 2012

Store cards are great for this, as are secured CCs. We built up Mr. Getawaysticks' credit pretty quickly by signing up for a Sears store card (I think I was primary) and buying a thing here and there and paying it off immediately. We then added him as a secondary to a car and got a regular Visa card. 7½ years later, he has better credit than me (for unrelated reasons).
posted by getawaysticks at 1:49 PM on April 24, 2012

Response by poster: Thanks everyone! We got married, and I've added her as a co-applicant on one of my cards. I was told by AMEX that this would help build her credit quickly.
posted by bbyboi at 3:04 PM on July 31, 2012