Leaving Peru - Credit score of Zero in the US:)

Answers to your qestions about moving to, and living in, Peru,
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tupacperu
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Leaving Peru - Credit score of Zero in the US:)

Postby tupacperu » Sun Jul 25, 2010 12:04 pm

We have lived in Peru for the good part of 7 years. Recently laid-off (March 2010-working from home in Peru), I now have a job in Phoenix AZ

While living in Peru I had no US credit cards or credit. Sold my cars and everything I owned and paid off the home that I own in Pennsylvania (family still there paying taxes etc..).

Now that I am back I have to buy a car, I am told that I have a credit score of "0". Though I have paid off 3 house in the last 20 years and had good credit. I am finding it hard to purchase a car with a "0" credit score without high interest rates. So, I am having to buy a used car ($10-12K) and finance $3000.00 of it to generate a credit score in 90 days. After 6 months I will pay it off.

We were looking for foreclosures in Phoenix and that is when I learned about a credit score of "0". The guy at the mortgage company said " no credit score is better than bad credit.

Has this happen to any expat returning to the USA after years out of the USA. Never knew you could have a zero credit score. I would recommend to any expat to maintain at least one credit account :-).


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Re: Leaving Peru - Credit score of Zero in the US:)

Postby craig » Sun Jul 25, 2010 12:10 pm

I thought you were opposed to using credit. :)

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Re: Leaving Peru - Credit score of Zero in the US:)

Postby tupacperu » Sun Jul 25, 2010 1:10 pm

craig wrote:I thought you were opposed to using credit. :)

Craig


Yes, I am opposed to credit cards and consumer credit, not opposed to credit for investment.

we are looking for foreclosures in Phoenix. Cannot live in my home in Philly or Pimentel while I maintain work in Phoenix. I need to buy a home/condo in Phoenix for the family. With rental and deposit on an apartment, I can get an FHA forclosure below market with $1000.00 down all closing paid. This would be less than I would pay to enter an apartment.

Nevada and Arizona were hard hit during the housing crisis and there are many deals to be had.

My oppsotion to credit is on products that drop in value as soon as you buy. I have to buy a car in this situation to buy a home. I am putting $10K down on the car so that I can buy the home in 3 months.
I could pay cash but I need to re-establish credit to buy a home. The job situation were circumstances beyond my control, so I wanted to take advantage. I purposely took a job in Phoenix (had an offer in LA), because the housing is cheap here and I love the weather (was 115 degrees last week). :)

My preference is to get into the US housing market while it is down, since I had to return. If I can find a deal, then the money invested does not lose value, may not rise much over the years but it would be an investment. I can rent it out for a profit (Arizona State Students) and come out of it with rental income when I retire to Peru in the next 5 to 10 years.
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Re: Leaving Peru - Credit score of Zero in the US:)

Postby craig » Sun Jul 25, 2010 2:08 pm

If you can get a fixed rate, long term loan then Ben Bernanke will pay your mortgage for you by inflating away the value of your principal. The property might not be a great value or investment but provided you shop carefully and don't take on more than you can support (you should be prepared to ride out a drop in RE values in the near term) you will probably do OK in the long run.

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Re: Leaving Peru - Credit score of Zero in the US:)

Postby micatjl » Sun Jul 25, 2010 3:11 pm

when i moved to the states i also had no credit. i got a 'secure credit card' (i think thats whet they are called). i needed $300 to start it but my credit score grew quickly and i got my money back minus whatever i had spent using the card. i'm sure you could also start the process from here to get things going. the card i got was from Orchard Bank.
good luck
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Re: Leaving Peru - Credit score of Zero in the US:)

Postby tupacperu » Sun Jul 25, 2010 8:30 pm

micatjl wrote:when i moved to the states i also had no credit. i got a 'secure credit card' (i think thats whet they are called). i needed $300 to start it but my credit score grew quickly and i got my money back minus whatever i had spent using the card. i'm sure you could also start the process from here to get things going. the card i got was from Orchard Bank.
good luck


Thanks, that looks like a cheaper route :-)
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Re: Leaving Peru - Credit score of Zero in the US:)

Postby inscop » Mon Jul 26, 2010 4:19 pm

Say WHAT? Leaving Peru? How will La Tienda del Pato survive?

To buy a house, I highly recommend going with a VA repo. You DO NOT have to be a veteran to buy one, and you can get in for 5% down and 4.5% interest. You do have to have a prequalification letter through the Band of America who is the vendee financing company for these sales.

Try this web site. You may get a certificate warning, but continue tot he page. Click on Arizona and start looking. You won't see a lot of Phoenix houses but rather the smaller towns surrounding PHX.

https://va.equator.com/

Rather than take some fool's word for it that you have no credit, check it yourself at www.annualcreditreport.com, a truly free site from your friendly US Gubmint.
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Re: Leaving Peru - Credit score of Zero in the US:)

Postby Polaron » Tue Jul 27, 2010 1:08 am

Tupac, I lived quite a few years in the Arizona desert: Stanfield and Casa Grande in the 1960s, Phoenix in the 1970s and Tucson briefly in the early nineties. You are going to burn your "kabookies" off, if you are not doing so already.

You might also consider looking for a house with owner financing, though they can be rare. There are also rent-to-own homes, where part or all of the rent you pay during the course of a year is diverted to a down payment. That way, you build up a payment history in order to qualify for owner financing.

There are still quite a few ways around a non-existent credit rating, which, if you are an adult, can sometimes be worse than a poor credit rating.

You might also consider asking a bank for a secured loan; putting $500 or $1,000 into an account and then asking for a line of credit against that deposit. You agree not to withdraw the money until the loan is paid off. That will get you a credit history within about three months.

Sorry you're leaving beautiful Peru for a redneck paradise like Phoenix. Arizona is a beautiful state, but its people are not nearly as nice as Peruvians. Oh, and if you want to fit in there, make sure you proudly display your pistol holstered on your hip as you walk from your air conditioned car to an air conditioned shopping center. :shock:
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Re: Leaving Peru - Credit score of Zero in the US:)

Postby tupacperu » Tue Jul 27, 2010 8:26 am

inscop wrote:Say WHAT? Leaving Peru? How will La Tienda del Pato survive?

To buy a house, I highly recommend going with a VA repo. You DO NOT have to be a veteran to buy one, and you can get in for 5% down and 4.5% interest. You do have to have a prequalification letter through the Band of America who is the vendee financing company for these sales.

Try this web site. You may get a certificate warning, but continue tot he page. Click on Arizona and start looking. You won't see a lot of Phoenix houses but rather the smaller towns surrounding PHX.

https://va.equator.com/

Rather than take some fool's word for it that you have no credit, check it yourself at http://www.annualcreditreport.com, a truly free site from your friendly US Gubmint.


Thanks for the info: Like the terminator says: "I'll Be Back" :)
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Re: Leaving Peru - Credit score of Zero in the US:)

Postby tupacperu » Tue Jul 27, 2010 8:33 am

Polaron wrote:Tupac, I lived quite a few years in the Arizona desert: Stanfield and Casa Grande in the 1960s, Phoenix in the 1970s and Tucson briefly in the early nineties. You are going to burn your "kabookies" off, if you are not doing so already.

You might also consider looking for a house with owner financing, though they can be rare. There are also rent-to-own homes, where part or all of the rent you pay during the course of a year is diverted to a down payment. That way, you build up a payment history in order to qualify for owner financing.

There are still quite a few ways around a non-existent credit rating, which, if you are an adult, can sometimes be worse than a poor credit rating.

You might also consider asking a bank for a secured loan; putting $500 or $1,000 into an account and then asking for a line of credit against that deposit. You agree not to withdraw the money until the loan is paid off. That will get you a credit history within about three months.

Sorry you're leaving beautiful Peru for a redneck paradise like Phoenix. Arizona is a beautiful state, but its people are not nearly as nice as Peruvians. Oh, and if you want to fit in there, make sure you proudly display your pistol holstered on your hip as you walk from your air conditioned car to an air conditioned shopping center. :shock:



I did alot of boating,camping by the lake and fishing in Arizona and Nevada during the summers (lived in LA 25 years). I love the heat, It's not like the humid summers in the east coast. Yeah, there are quite a few rednecks,drunks and drug addicts (to my surprise), but the housing is cheap and while I am waiting to return to Peru I can add another home/condo to my portfoilio. I kind of like it here (minus the dry lawns and rock gardens - :) . Thanks for the advice.
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Re: Leaving Peru - Credit score of Zero in the US:)

Postby rgamarra » Thu Jul 29, 2010 9:41 am

My husband and I just bought a car in the U.S., we had our cash tied up in a CD, but we were able to manage a $10K secured loan (borrowed against CD) for 3.5% APR. We did this through our credit union.

You can do it like we did (open a CD & borrow against it) or you could open up a savings account and request a secured consumer loan (borrowing against savings) and build your credit that way. They usually do it in 6 mos. increments for as little as $250 USD, but you can always pay it off before then. It might be easier to do this through the bank than go the credit card route where you have to pay an annual fee.

Also, if you do need credit, you can get one of these prepaid cards at any Walmart or gas station and load it up as you need. The fee is somewhere around $5, but it's a secured credit card.

Another alternative is to rebuild credit through a rent-to-own store.

Anyway, there's plenty of options, but I suggest going through your bank or credit union and asking for a secured loan. You're likely to get a better APR through them.
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Re: Leaving Peru - Credit score of Zero in the US:)

Postby tupacperu » Fri Jul 30, 2010 5:15 pm

rgamarra wrote:My husband and I just bought a car in the U.S., we had our cash tied up in a CD, but we were able to manage a $10K secured loan (borrowed against CD) for 3.5% APR. We did this through our credit union.

You can do it like we did (open a CD & borrow against it) or you could open up a savings account and request a secured consumer loan (borrowing against savings) and build your credit that way. They usually do it in 6 mos. increments for as little as $250 USD, but you can always pay it off before then. It might be easier to do this through the bank than go the credit card route where you have to pay an annual fee.

Also, if you do need credit, you can get one of these prepaid cards at any Walmart or gas station and load it up as you need. The fee is somewhere around $5, but it's a secured credit card.

Another alternative is to rebuild credit through a rent-to-own store.

Anyway, there's plenty of options, but I suggest going through your bank or credit union and asking for a secured loan. You're likely to get a better APR through them.


Thanks, I will consider them all. I like the CD scenario. And I have looked into the prepaid option for a $200.00 credit limit Orchard Bank.


I have not had a car in 6 years living in Peru for that time. I dread the expenses, gas, insurance maintenance. Probabaly go with a low mileage used , 1 owner car.

After many years of buying cars and homes (good credit), I could not believe that has all been awash (-:

Starting over in the USA. The next move to Peru should be permanent (retirement).
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Re: Leaving Peru - Credit score of Zero in the US:)

Postby scott » Sat Jul 31, 2010 1:15 pm

Here is a good and recently published guide to safely build credit in the US:

http://consumerist.com/2010/07/how-to-safely-build-credit.html

How to Safely Build Credit

It's becoming increasingly clear, especially in this economy, that having a good credit score is absolutely crucial. Whether it's credit checks for job applications or one of the other unexpected places your score is used, it's clear that your credit score has a significant impact on your life... even if you don't need a loan.

That's why it's absolutely crucial to begin building a responsible credit history as soon as possible. It might feel like you're reinforcing a broken system but, then again, you probably don't use kilometers and kilograms either.

The first step is to see if you've already developed a credit history. If so, you can skip this article entirely as you're well on your way to building credit. It's important to review your credit reports at AnnualCreditReport.com at least once a year from each bureau.

If you have no report or it's completely devoid of accounts, try applying for a credit card. Despite the economy and the higher requirements for other loans, like mortgages, getting a credit card is still relatively easy. If you have income, chances are you will be approved for a small line of credit. If you aren't, the next best option is to try to apply for a retail credit card, such as from a department store. Those cards have very low limits, often in the hundreds of dollars, but they all count (practically) the same when you're building your credit.

Finally, if all else fails, you can try a secured credit card. Secured credit cards are often expensive, having application and maintenance fees, but if you shop around you can often find very affordable secured credit cards from major banks.

Once you get a card, pay it off in full and don't charge more than you can pay within a single payment period. You don't get bonus points for carrying a balance and paying the credit card company interest or fees. 35% of your credit score depends entirely on your ability to pay on-time and experts say a solid 2-year history can put you on track for a good credit score.
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