27 and just now building credit

posted 3 years ago in Money
Post # 3
Member
1902 posts
Buzzing bee
  • Wedding: April 2012

There are lots of things that contribute to your credit history.  Paying your cell phone, electric bill, rent definitely help.  I would check your credit score just to see what it is now. 

Post # 5
Member
11668 posts
Sugar Beekeeper
  • Wedding: November 1999

I have no idea how long it takes to build credit since I’ve had credit cards since I was 16 or so.  However, if you’re having a tough time getting approved for a credit card and your husband already has cards, he can add you on to his account which will help.

 

 

 

 

 

 

Post # 6
Member
11722 posts
Sugar Beekeeper
  • Wedding: November 1999

The good thing is, you don’t have bad credit.  Once you get the card, use it responsibly, pay the bills, and you will slowly build up your credit.

As for the mortgage, your husband as a decent credit score, so he may be able to qualify alone, so your credit score wouldn’t matter.  Talk to your lender and they will give you your best options!

Post # 7
Member
11722 posts
Sugar Beekeeper
  • Wedding: November 1999

@louisianablue:  Electric bills, cell phones, rent, and the like don’t positively count against your credit score.  They only count when you fail to pay them (thereby reducing your credit score).

Post # 10
Member
11722 posts
Sugar Beekeeper
  • Wedding: November 1999

@gardenroses:  He has a good score – don’t get me wrong.  But improving it will help you a lot with mortgages (higher scores = lower rates).  As long as he’s paying his bills, the refinancing and car loan shouldn’t be negatively affecting it — I’m not positive on that though since I’ve never done that.

I do know DH has consolidated his student loans from law school (so $$$), and it did not affect his credit score.  Has he checked his credit report recently to make sure there isn’t anything funky going on? There are 3 reporting agencies, and if something is out of whack with one of them, it can affect all three.

Post # 12
Member
11722 posts
Sugar Beekeeper
  • Wedding: November 1999

@gardenroses:  You get a copy of your official report when you apply for a mortgage, generally, so he may want to wait and get it there.  You only get one free one a year (per reporting agency) so he may want to wait.  Checking your own score actually does not hurt it – it’s when a bunch of other agencies come in and check it when it gets dinged!

Has you husband had credit for a long time?  I’ve had a credit card since I was 18 (I’m 25 now) and I have a really good score – so it might just be the length of time he’s had cards open. 

Post # 13
Member
258 posts
Helper bee
  • Wedding: October 2013

@gardenroses:  Hi! I am a mortgage professional. I see people with BAD credit all the time. The good news is, you don’t have bad credit! You have “limited” credit. That’s really good. You have a fresh slate! 

The best thing you can do is open 2-3 different types of tradelines, i.e a revolving account (credit card – avoid store credit cards, and go for one through a major bank), an installment loan (i.e car loan, personal loan through a credit union/bank). Variety in the types of credit accounts you hold help your score. 

One of the previous posters was incorrect in telling you that paying your rent/electric/phone bills helps your credit. It has nothing to do with your credit. The phone company may pull your credit report before giving you a contract, but they are not going to be anywhere on your report. They only show up if they go into collections. 

One of the biggest factors in your credit score is your debt utilization ratio. Ideal is 25% or less. So, for example, if you have a credit card with a $1,000, never charge more than $250 on it. You don’t want to show the credit companies that you’re using all your available credit – makes it look like you don’t have sufficient cash flow to cover your expenses. 

I could go on an on, but the gist is this – open a couple of tradelines, pay your bills ON TIME (seriously, that’s super important) and over time, your score will go way up. Give it at least 6 months to a year. But you won’t be turned down for a mortage with limited credit. We can work with that. What we don’t like is damaged credit – late payments, over-the-limit accounts, etc. 

You’re in a good place now!

Post # 14
Member
682 posts
Busy bee
  • Wedding: June 2013

My DH got his first credit card not very long ago–and what the bank said was that no credit is easier to fix than bad credit!!

He got a really low limit credit card ($500) through his credit union and a year later he had a credit score of 730 and they upped his credit line to 2k.  They said it’ll be getting better and better since the biggest factor is that his credit card has only been open for a year.

He still pays cash for everything, though, this is mostly just for getting a house.

Post # 15
Member
9137 posts
Buzzing Beekeeper
  • Wedding: November 2013 - St. Augustine Beach, FL

@FutureCuomo6610:  The best thing you can do is open 2-3 different types of tradelines, i.e a revolving account (credit card – avoid store credit cards, and go for one through a major bank), an installment loan (i.e car loan, personal loan through a credit union/bank). Variety in the types of credit accounts you hold help your score.

Flawless advice from someone who knows what they are talking about.  Just make sure not to charge things you can’t afford to pay off quickly.  A small revolving balance is okay so long as you are making more than minimum payments and you could pay it off immediately at any time.

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