Real Answers for Life’s Money Challenges
Im a housewife who does not work outside my home.
The only income I have on my own is my Social Security, which isnt much.
My husband and I have had bad credit in the past.
I want to establish credit in my name.
Is there a way I can go about doing this?
-K.
Dear K.,
First of all, lets separate your credit history from your husbands.
But your credit reports, which are used to tally your credit scores, are your own.
Its important to think about your goals here.
The easiest way to build credit is with a credit card.
You dont need a job to get one.
What you need is income.
Your Social Security benefits may not be much, but they still count.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help… Youll put down a deposit typically $200 to $500 and use that as your line of credit.
In these tough times, I get that not everyone can spare several hundred dollars for a deposit.
Focus on building an emergency fund before you apply.
If you could afford the deposit, Capital One and Discover usually have good secured card options.
(No, neither one paid me to say that.)
Because youre putting down that deposit, the credit and income limits are much less strict.
Look for a card with the lowest possible annual fee and APR.
Youll want both to be as low as possible, of course.
But hopefully youll be paying off the balance each month so that the APR wont matter to you.
Also see to it the card issuer reports to all three bureaus so that youre building a credit history.
Payment history is the most importantcredit factor, determining 35% of your score.
Then, pay it off in full each month.
If you do everything right, your credit could start to improve within about six months.
The key to fixing bad credit is to see to it youve addressed any underlying issues, as well.
Some people wind up with credit problems because of a crisis that was out of their control.
Living without credit, as youre doing now, is tough.
But it does force you to limit your spending to what youre bringing in.
confirm you dont change your spending when you obtain greater access to credit.
One thing you dont say is whether your husband wants to fix his credit, too.
Its essential that you make a budget together and hold each other accountable.
Encourage your husband to apply for a secured credit card as well.
All the discipline in the world on your part wont go far if youre not in this together.
Robin Hartill is a certified financial planner and a senior editor at The Penny Hoarder.
Send your tricky money questions to[email protected].
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