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Author: lethean Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308858  
Subject: NO credit - 2 questions Date: 5/24/2012 6:48 PM
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Hello

I don't often read this board but am in need of some help and information.

A family member attempted to get preapproval for a mortgage recently. He was informed by the bank that he has NO credit on file at the 3 major credit bureaus.

What happened? This family member has been using a credit card for the past 15 years - paying the balance in full each month. Long story short. In 2005, Citi changed his personal credit card to a business credit card without his knowledge. (In 2005, he was told by phone that there was suspicious activity on the 1st card. That credit card account was cancelled and a new account opened (presumably, the business credit card.) And as everyone here probably already knows, the business credit card does NOT report to the 3 major credit bureaus. UGH.

This family member has lived in the same apt for the past 4.5 years, paying rent and utilities - but those are not reported either.

Further, he paid cash for a used car. No loan history there either.

This is a real bummer, for him.

SO. What can I do to help out in this situation? Family member is responsible and disciplined. Things I am considering:

1. Add him as an authorized user or joint owner on ONE of our credit cards. Comments?

2. Add us as cosigner for preapproval for his mortgage - and cosign with him for a mortgage when that time comes. Is this possible? I would consult an attorney for input before cosigning. Comments?

3. OR, should we plan to take out the mortgage and use him as a cosigner?

Remember, at this point he has NO credit on file with the credit bureaus.

He has already applied for a personal credit card and has supposedly been accepted (by the bank where he tried to get preapproval for mortgage). But even THAT was tough to get - "because he had NO credit".

But even building credit for the next 6 months won't qualify him for the best mortgage rate. Right?

So in summary, there are 2 question.

How can I best jump start his credit history and score?

What is the best way to help him get the best mortgage rate?

It seems to me that we are either going to have to cosign and/or sign as primary on the mortgage.

I'd really appreciate some help.

Thank you.

ML
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