In article <ac58f720.0310191330.7a1751cf[at]posting.google.com> ,
ront2[at]socal.rr.com (ront2) writes:

- quote -

If your daughter's name is added as an account holder, and if the credit card
issuer reports to one or more of the three major credit reporting agencies,
then, yes, it will help her qualify for a loan because your good credit with
that card will appear on her credit report. This also means that she becomes
responsible for paying off the card if you fail to do so.

If you add her as an authorized user, technically she isn't responsible for
paying off the card and the account shouldn't appear on her credit reports.
More likely, however, the account will appear on her credit report and, if you
should default on the card or if you die and your estate isn't able to satisfy
that debt, the credit card issuer would likely try to pressure your daughter to
pay it, though, unless she signed a contract with that credit card issuer, she
isn't responsible for that debt.

Note: whether she is an authorized user or a co-party to the credit card
agreement, she could run up charges on that card and you would be responsible
for paying it. Even if you never have a card issued in her name, the account
number may appear in her credit report (my credit union reports only part of
the account number) and many mail order companies and a good chunk of Internet
store fronts will take the credit card number without ever seeing the physical
card.

Does your daughter need to purchase a place right away? If not, a better
approach would be to direct her to a secured card that does report to the CRAs
or a store card (not Sears because they have a high standard for qualifying for
their card) or a gas card, or a card from her own bank or credit union, have
her use it occasionally for items she would normally be buying anyway, and pay
it off in full when the statement arrives. In applying for cards, fewer is
better--no more than, say, one application every other month, because too many
applications ("hard enquiries" on the credit report) makes one look desperate
for credit, which then reduces the credit score. After about six months of
using that card occasionally, if it appears on the credit report, she will
likely qualify for normal credit card (not the high prestige ones, but a
typical VISA or MasterCard) and can continue building a good credit history
that way.

Secured card = a credit card where one has to make a deposit to that card
issuer, and the credit limit becomes the amount of that deposit, typically $100
to $300.

One of the places one can look for secured credit cards is on bankrate
(http://www.bankrate.com).

Note: I said above for occasional USE of the credit card, NOT paying interest.
It is the USE of the card and the balance on the reporting day that shows up on
the credit report, NOT the amount of interest paid, so there usually isn't any
need to pay any interest unless the card doesn't have any grace period at all.
(Some cards have no grace period: interest charges start the day the card is
used. Many cards have a grace period--as long as the balance had been paid off
in full by the most recent due date.)

Many people don't like credit cards at all because they present a temptation to
buy now without adequate cash in the bank and spend the next few months paying
it off, and then it creeps into using the card to try to live beyond one's
means.

On the other hand, a disciplined approach of using the credit card
appropriately can be a nice financial tool for building credit, helping with
cash flow (e.g., an expense at the end of an expensive month can be paid from
the next paycheck, but if this becomes frequent or needs more than the next
paycheck it is a warning sign), and for certain protections offered by credit
purchases (e.g., ability to dispute a charge if goods or services weren't
delivered).

Now, back to the "no down payment loan"--generally the interest rate will be
higher and the lendor will want PMI (Private Mortgage Insurance) because those
with less than 20% down are statistically at more risk at defaulting on the
mortgage, so the higher interest rate is to compensate for that risk and PMI is
an added protection the lendor wants. Many mortgage _brokers_ also offer "combo
loans", which is typically a first mortgage for 80% of the purchase price and a
second mortgage, HEL, or HELOC for the other 20% but typically at a higher
interest rate or an adjustable rate. So your daughter should be cautious about
checking that she can indeed afford the monthly mortgage payments, property tax
payments, and home owners insurance premiums, as well as build up enough cash
reserves to handle routine maintenance. Generally lendors look for two or three
months of mortgage payments in liquid assets (cash, savings, securities that
could be liquidated in short order like stocks or bonds).

Mark A. Young

Daughter said she and hubby can qualify for no down loan, if wife and I include
her name on our VISA card. We have a good *history* on the VISA card. Is this
the same as *co-signing*??. Daughter says they want good *history* to qualify
for loan. Thanks, Ron ront2[at]socal.rr.com