The car that I am driving is currently under my wife's name because
she has a higher FICO score than I so that she could get a better
interest rate at the time we purchased the car. She currently have
more debt than mine(student loan & credit card loan).
1) Should we share the ownership of the car so it will help building
my credit history, or
2) Should we just keep the car under her name so if later I want to
get a mortgage loan or commerical loan, my credit report will not show
that much debt
3) Should we just transfer the ownership under my name?
Which way will be the most beneficial for me in the sense of improving
my FICO score and applying for loans in the future?
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i think u should share the ownership
At this point, it doesn't really matter if you "share ownership." By
this I assume you mean adding your name to the title. FICO is based
on how the car was financed, not the current ownership. If your wife
took out the loan on her own, then this will not change (unless you
refinance and take out a new joint loan.) As far as taking out loans
in the future, the equity in your car will be considered a joint asset
if you are taking out a joint loan as a married couple. So, there is
nothing that you can really do to influence your credit score at this
point besides refinancing the loan (and starting over with your
payments due on the remaining balance) which would probably not be
advisable.
I would like to say thank you for everyone comments. We may just keep
the ownership of our car under my wife name as we couldn't find any
better interest rate than the current one that we are receiving.
For clarification, should we just pay off only 80% of the credit card
balance each month or pay in full in the sense of improving FICO
score, or it really does not matter as long as we pay on time every
month.
One last question regarding credit card before rating your answer and
giving out tips: My wife have 3 credit cards and all of them have
pretty high credit limits and long histry (over 5 years), but she
decided to use only 1 card as it will be easier to keep track of her
record.
1) Should she just keep the other two that she does not use so that
she will have more positive information shown on her credit report, or
2) Should she just cancel the other two so that her credit report
will not show that much unused credit limit (lenders may view her
unused credit limit as potential debt).
Thanks!
Changing anything will just make waves.
If you really want to build up your credit history, then do it the normal way.
Play with credit cards - but pay them off prudently.
Ditto anything else that requires credit checking.
Just act really normal ... but fairly responsible.
As an amusing aside, a guy I know in the UK who was worth at least GBP
8m at the time, applied for a credit card - and was turned down.
Reason - he had never borrowed anything from a lender that used the
credit rating agencies.
Of course he was a prat, because he should have brought the matter up
with his bank manager over lunch ... but even so, he was humiliated.
To summarize, when making any purchase, back it with cash in a
separate bank account and take 'advantage' of 'interest free' credit
(12 months max), also use credit cards for all purchases, and pay off
80% each month.
Please /don't/ get tempted to play the system and get yourself truly stuffed.
I assume that you are trying to get a decent rating for a mortgage.
For that 20% savings helps a lot ... (hint).
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