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Can someone explain credit to me?

Started by Hayden, October 13, 2018, 07:34:29 AM

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FS Community-

I am fully aware of the basics of how credit works. My wife and I just got married and neither of us have ANY credit history. I tried applying for a basic credit card through Chase bank and got declined. My wife does have a little higher score than me due to her paying off student loans years ago. However, can she just apply for a card and make me an authorized user? When you're married does it matter which of us builds a credit report if we have everything combined? I would love to hear some insight.
Very Respectfully,


After I turned 18, I could not get a credit card because I had no credit history as well.  I, too, was turned down by the companies.  In order to establish something for credit, I to the bank where I had savings/checking accounts and took out a 90-day loan for $2000.  I put the money in a saving account during that time and paid it back over the 3 months.  Despite the paying the interest and origination fees on the loan, I had a great credit history in a short period of time.  That event was decades ago.  I don't know if you can establish credit history as easily today with student loans as a part of the mix.  Other members of the forum may be able to give better feedback. Good luck!


Congrats on getting married!

Your wife can apply for a card and add you as an authorized user.  Make sure you both use the credit cards and pay it off at the end of the billing cycle.  When you pull your credit report, the credit card should show up on both of your credit reports as paid in full every month, never late.  That will help build your credit.  If you can find one that gives you some type of rewards with no annual fee i.e. cash back or travel points towards a purchase, even better since the reward is free if you pay off your balance monthly and not pay any interest.

Another option, but I don't know if it will work, is get a store credit card in just your name, i.e. Macy's.  But again you have to use the credit card and pay it off.  I think the store credit cards are handed out to just about anyone, but that is my opinion not fact.


Hayden, you have at least three credit reports.
One from Transunion, one from Equifax and another from Experian.

These credit reporting companies are gathering data to show your financial history which involves borrowing money: credit cards, auto loans, mortgages, school loans, if you pay your debts on time, how much debt you have relative to the credit limits, the age of the credit lines, how many creditors are looking at your files to see if you might qualify for credit, and what types of credit lines you actually have.

It's basically a report card on your credit worthiness and how well you manage your financial debt.

Each individual person has his or her own credit reports and credit score. There is no such thing as a joint credit report. If you and your spouse apply for a joint mortgage, each of your credit reports will be pulled. But even if you have a joint loan, you will never have a joint credit report.

To establish a credit history, you must borrow money.

This can be a personal loan at a bank or credit union which you repay in a few months. This loan will be reported to all three credit reporting agencies and as long as you pay on time and in full, it will contribute to positive data in your file.

Inquire at your bank or a credit union if you can apply for a secured credit card. This is a card that is secured by a monetary deposit, one which you do not touch. You use the card, prove you can manage the bills and pay on time, and eventually you should qualify for a traditional credit card.

If your spouse adds you as an authorized user to a credit card, this line of credit will show up on your credit reports. Use the card, but keep the debt to credit ratio under 30%. In other words, if the card limit is $1000, don't charge more than $300 per month. Pay it off on time, every month.

In a few months, you should be able to create a positive credit file in your name. This will cause your credit score to rise.

Speaking of your credit score, 35% of the score is paying your debt on time, 30% is how much debt you have relative to the credit limits, 15% is how old the lines of credit are (the older the better; don't close old credit cards), 10% is how many credit inquiries you have had, and 10% is based on the types of credit lines you have.

Be mindful of these.

Use your credit lines wisely, don't abuse the privilege, and keep track of your expenditures. It all starts with a monthly budget, my friend, and making sure you control your money and it doesn't control you.