Quickest way to build credit score?

Seeking advices from you monkeys on how to quickly build up your credit score in the US. Long story short, I'm a Canadian who will be relocating to the US to work soon. Sadly, all the credit history I've built over the years are not transferrable to the US, so I'll be starting all over and be treated as if some 18 yr old is getting his first credit card.

Appreciate any tips on things I should do and avoid to build up my credit score quickly.

 
vik2000:
Seeking advices from you monkeys on how to quickly build up your credit score in the US. Long story short, I'm a Canadian who will be relocating to the US to work soon. Sadly, all the credit history I've built over the years are not transferrable to the US, so I'll be starting all over and be treated as if some 18 yr old is getting his first credit card.

Appreciate any tips on things I should do and avoid to build up my credit score quickly.

Lease a car, apt, or apply for a credit card. That will establish credit history.

 

If you have family in the US that are fiscally responsible, see if you can come on as an authorized user and use their card but pay it yourself. You will get the benefit of the size and age of their account, and they will hopefully get the benefit of the points you spend. The major risk to them would be that you default and they get stuck covering the bill.

If that's not possible, go to your preferred banking institution and open a card, after about 3-6 months, request a credit limit increase. Set the card to auto pay in full on the due date and sit back. You want to keep your monthly spending below 30% of the total limit, preferably lower than 10%.

 

I'd recommend signing up for a free service like credit karma, their scores are not the ones used by the banks in lending situations, but the factors are pretty similar, just weighted a little differently. If you can get your score about like 740 on credit karma you most likely will have a good score on the real models.

Don't cancel your card, just leave it open. Opening cards can result in a hard pull which will probably pull your score down by 0-15 points over a period, the ding falls off after two years but I believe the effects start going down after about 3-6 months. You can achieve a pretty good score with just a few cards, when I got my mortgage at 22-23 I had about 3 credit cards and averaged like 805 across my credit reports. The secrets are pretty much to just never pay a bill late (set up auto pay), have low spending compared to your limits (1-10% of total limit amount) and the age of your accounts.

 

A lot of the advice here is for American nationals. As a Canadian national, you won't be able to get an unsecured credit card (regardless of your income levels) or be able to piggy-back anyone else's cards (at least at Wells Fargo). This advice applies to TN1 visas, maybe someone else can speak to H1B's.

Step 1 - Who are you banking with in Canada? Turns out CIBC is basically non existent in the US and has few affiliates. If you are with TD or BMO you'll be able to have more services available (I'm with CIBC so I'm not sure exactly what these services are). Step 2 - Get a secure credit card with say $300-$500 on it ASAP (if you have say, $2,000 limit, it won't give you any added benefit). Pay it off automatically for 6-12 months, and then you'll likely be able to get an unsecured card but this is a discretionary choice from the bank. This builds your credit in a minor way but important way. Step 3 - Put all utility bills or cell bills on this card. Step 4 - When you are finally able to get unsecured cards, keep 1-2 cards max. More cards hurts you, as well as when you initially close any card.

You won't be able to get grocery store credit cards. Sadly, I was rejected by both Walmart and Target. I was also rejected from Capital One, all for the same reason. This is the reality of being a foreigner who can walk across a border and never have to pay back their debt. Good luck!

Just had my trade dispute rejected by Schwab for a loss of 35k. This single issue alone should be a gigantic red flag to anyone who trades on their platform. If they have a system error, and you do not video record your trading (they actually said this), they will not honour their fuck up. Switching everything away from them. Fuck this company.
 
<span class=keyword_link><a href=/finance-dictionary/what-is-private-wealth-management-PWM><abbr title=private wealth management&#10;>PWM</abbr></a></span> Hopeful:
A lot of the advice here is for American nationals. As a Canadian national, you won't be able to get an unsecured credit card (regardless of your income levels) or be able to piggy-back anyone else's cards (at least at Wells Fargo). This advice applies to TN1 visas, maybe someone else can speak to H1B's.

Step 1 - Who are you banking with in Canada? Turns out CIBC is basically non existent in the US and has few affiliates. If you are with TD or BMO you'll be able to have more services available (I'm with CIBC so I'm not sure exactly what these services are). Step 2 - Get a secure credit card with say $300-$500 on it ASAP (if you have say, $2,000 limit, it won't give you any added benefit). Pay it off automatically for 6-12 months, and then you'll likely be able to get an unsecured card but this is a discretionary choice from the bank. This builds your credit in a minor way but important way. Step 3 - Put all utility bills or cell bills on this card. Step 4 - When you are finally able to get unsecured cards, keep 1-2 cards max. More cards hurts you, as well as when you initially close any card.

You won't be able to get grocery store credit cards. Sadly, I was rejected by both Walmart and Target. I was also rejected from Capital One, all for the same reason. This is the reality of being a foreigner who can walk across a border and never have to pay back their debt. Good luck!

Thanks a ton for the tips. I've heard getting unsecured card is extremely difficult. I have several friends who are down there (TN Visa, same as me) who said BAML was the only bank who was willing to give unsecured cc in the beginning. In Canada, I'm currently with a credit union but plan to switch over to TD before my departure. They have quite a sizeable presence in the East, and there is actually a branch nearby by workplace. I guess I'll have one TD account and BAML account.

 

As a Canadian you can sign up with TD Bank (US) and get the EasyCash credit card approved using your Canadian social. VERY IMPORTANT: once you get your US social, go to the bank and add it to this credit card in order to build credit. The TD one is an OK no-fee card (1-2% cashback, no foreign transaction fees), and you can use it for a few months to build credit and until you can get the sapphire reserve.

From there OP, you want to increase the # of places you borrow from and amount you borrow (it's somewhat counter-intuitive, but credit scores essentially reward you for having tons of credit being available to you) while paying off your bill completely every month. Agreed with above user to use credit karma as a tracker (although it won't be useful until you have a bit of a history).

p.s. I would also get T-Mobile when you move to the US because you can call/text to Canada for free, and your entire plan+data transfers over to Canada when you travel (and a lot of other countries) for free.

 

I recommend just getting a credit card with the American bank you open an account with and starting there. It will take up to a year to build a decent credit history.

However, having a credit card and paying it off on time is not enough. In order to go from "very good credit" (740 - 799) to "excellent credit" (+800), you MUST assume some sort of mortgage loan (such as auto, house, or student loans). Unfortunately, that is just what you're going to have to do.

Having a loan along with other types of credit demonstrates that you are able to manage a variety of credit types. That is the quickest way.

That being said, a FICO score of +740 is considered very good, but not excellent.

Source: FICO.

http://en.wikipedia.org/wiki/Chewco
 

If you have over a 740 it is probably of pretty low benefit to put a momentous effort into raising it much higher. Whether any bank really wants to admit it that isn't where the yield is, so the incremental gain isn't really all that much. Conversely, a terrible score will have dismal impacts on what you end up paying.

 

I think Fair Isaac provides ways to do this on their website However, I think the biggest considerations are credit utilized to credit available, and number/history of credit lines.

You might look to see if these models are using "proxies" to score your credit if it is not a true FICO score.

 

Appreciate all the helpful responses. What's an ideal credit score to obtain house mortgages (200-300k)? The main reason I want to build out credit score quickly is that I want to keep an option open to potentially purchase a place in about 10 months. The company's relocation package covers up to a year, and I thought it would be nice to have a place ready when I move the family over near the end of the first year. Not sure if this is viable or too tight of a timeline to achieve.

 
Best Response

the simple answer to you question is you can get approved for a mortgage with basically anything over 550, which is effectively having a pulse (ever hear of the sub-prime mortgage crisis? lol). The longer and better answer to your question is you want the highest score possible (basically at or around 800), as your mortgage interest rate is going to be inversely correlated to your credit score and every bp(s) adds up quickly. When you apply they'll put you into a credit tier and some not very fancy algorithm will spit out a number based upon your credit score/history. As you alluded to, I am not sure if your 10 month window is going to be able to establish enough history to warrant the highest tier even if youve made payments on time over that period (think about all the people who have had at least a gas card or car payment since they were in college).

TL;DR: you will absolutely be able to get a place/mortgage in 10 months; but you might have to pay more than you'd expect BC of the lack of elapsed time.

 

No one wants to capture an 800 FICO due to prepayment, and you can't sell sequential pacs to GNMA/FHLMC/FNMA

Is he going to pay more? Oh yeah, but in points, not rate. My point was the stratification on the scorecards tapers at the higher credit levels.

edit: the concept is referred to as "risk based pricing", just fyi

 

I have never seen such random advice being given. what a bunch of fools.

I'm an immgrant as well and these are the steps to guarantee a 600+ credit after 6 months, and 700+ after 18 months.

  1. Open a $500 secured card (with $500 of your cash as collateral). Wells Fargo and BofA do these. It takes a week for the application to approve.

  2. Spend $100 per month (or 20% of whatever you choose as your collateral).

  3. Pay anount outstanding in full each month. After 6 months, go to creditkarma and you'll see a 600+ credit score.

  4. Apply for an actual credit card, you'll get approved at any bank.

  5. Spend up to 20% of your limit each month and pay in full each month. Your CS will go up to 700+ after 6 months. Your bank will also increase your limit at this point by 2x without asking you.

  6. Cancel secured card

You're welcome

 

I imagine that you'll be fine. I would send them an email now saying that you're excited about the job and that they should contact you if anything in the background check isn't ideal. Then they might contact you before directly firing you, and you might not even have to explain yourself. Plus, you're supposed to be in debt when young... BTW, how do you have a summer offer already?

 

I don't want to go into too much detail here, but students who have participated in certain summer programs in their past are eligible to apply early/get their offers early. I was one of these students.

As for the email, I think that's what I will probably do. I have until February to reply to the offer, but for right now I'm thinking being totally upfront about it would be the best policy. Thank god I didn't get a DUI or anything like that back in the day...or this would be a hell of alot worse.

 
shorttheworld:
...has nothing to do with not having a mortgage. i had a 803 coming out of undergrad... do you miss payments or have any other shoddy creditness? or uber young credit?

Damn, thats impressive. I thought I set the record with 720-760 between all the bureaus. From 18 I had a 4-wheeler, 2 cars, 4 cc's..all paid off.

 
noway:
incredibly noob questions but how do you check these things?

Freecreditreport.com

There are also a few other sites.

"Greed, in all of its forms; greed for life, for money, for love, for knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA."
 

Actually, most of these financial firms will not hire you if you have charge-offs, collections, and judgments outstanding against you. This is because they cannot get bonding for a person who has credit problems which essentially makes the person unemployable. Surprisingly, after you complete a bankruptcy, it is really easy to get bonding for a person. Basically, the assessment is that a person who has completed a bankruptcy is far less likely to commit a financial fraud or financial crime than a person who is being harassed by the collections agencies or who has outstanding judgments or leins against him. So, ironically, if you do have credit problems, you may find yourself without a job until you complete the bankruptcy process. After the bankruptcy is completed, you are a new person with a new lease on life and suddenly employable by these financial firms who can get bonding for you just as easily as they can for a person who does not have any credit problems at all.

 

This starts to creep me out. I am a huge proponent of putting stuff online etc, but this begins to worry me. I mean, conceivably, health insurance companies could ask for your facebook to help lower your insurance policies. I'm certain they would charge a lot more in premiums if there were a ton of pictures of you drinking or something of the sort.

Social networks have to be very careful about selling information or allowing companies access to that infomation. Obviously this would hopefully be an opt in type system but eventually all those end up becoming the standard as more and more people opt in. I mean at a certain point identity theft becomes child's play.

 
Addinator37:
This starts to creep me out. I am a huge proponent of putting stuff online etc, but this begins to worry me. I mean, conceivably, health insurance companies could ask for your facebook to help lower your insurance policies. I'm certain they would charge a lot more in premiums if there were a ton of pictures of you drinking or something of the sort.

Social networks have to be very careful about selling information or allowing companies access to that infomation. Obviously this would hopefully be an opt in type system but eventually all those end up becoming the standard as more and more people opt in. I mean at a certain point identity theft becomes child's play.

I think with the amount of data now available, this will be a super hot space for start-ups, and kind of reminds me of the peer-to-peer lending networks like LendingClub.com and Prosper.com. If those companies could integrate or develop this type of technology to make the "ratings" even more accurate, coudl reduce friction / lending costs even more for worthy borrowers (good in my world).

In a world with more transparency (assuming fraud systems and the algos are solid / kept confidential), other things being equal, the actual strong borrower wins with a lower cost of borrowing and the more suspect borrower pays the appropriate rate of interest (instead of getting subsidized by good borrowers).

In other words, bring it on and give me that mortgage for 2.2% please.

Thanks, Patrick

 

Would posting pictures of me on a friend's yacht improve my e-credit score? If I know filthy rich people, will this help as well? If I link my legit accounts to my shell accounts, can I increase my e-social capital?

If I friend Goldman Sachs, can I get a money line from God?

Get busy living
 

There is possible ton of money to be made in this...for Facebook. Obviously I don't know how the industry would work but for example a borrower could "opt in" to have their profile be included in the credit / insurance analysis. I doubt Facebook would be obligated to send data to lenders/insurance companies even if the customer wanted to. Hence, Facebook charges for access to the data. Companies could pay a recurring fee for access to the data when data access is approved by the user. Bam, easily scalable, stable recurring revenue.

This is just an example but it does show the potential for Facebook's huge database of ACTUAL human behavior. I've said it before...it has a ton of potential for revenue.

And there are ways to validate accounts...

 

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Disclaimer for the Kids: Any forward-looking statements are solely for informational purposes and cannot be taken as investment advice. Consult your moms before deciding where to invest.
 

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