Tuesday, March 10, 2009

Credit Line

Philip's loan application for a condo has been turned down. His credit rating is great, but he doesn't have enough credit lines for the bank to okay him for a mortgage.

He had no need for a credit card and preferred to use a debit card. But now we're discovering that there's a different sort of need for a credit card, even if you use it only for filling the gas tank and make sure it's paid off in full each month. That would be another line of credit that he could use to prove himself.

The loan officer told him he needed three credit lines and has only one. Since he has a monthly phone bill, I guess that means his apartment during his last year of college doesn't count, and apparently neither does paying off his college loans, although those probably do contribute to his excellent credit rating.

Now it's a matter of deciding whether he wants to rent an apartment or continue to live at home a little longer, building up a bigger downpayment on a mortgage and taking on two somethings to prove himself credit-worthy.

This makes me realize that it's probably a good thing that I was paying the phone bill at the parsonage. For most of our marriage, we had only one credit card. I saw no use for extras. We didn't have rent or mortgage payments, being in the parsonage. The church was supposed to be paying the utility bills, so we didn't have heat or electricity or garbage pick-up bills to prove our credit-worthiness. Not long after we arrived there, though, a monthly phone bill wasn't paid. I'd paid the long-distance fees to the church so that the treasurer could remit payment, and was shocked to find the following month that the phone company hadn't even received the part of the phone bill that I'd paid. Seeing as how the bill was in our name (not church's), I was not pleased about our credit reputation being affected by church's non-payment habits. So I started paying the phone bill myself. And it's a good thing: when we applied for the mortgage on the house, we had our one long-term credit card, our phone bills, and the only other credit line we had was a rarely-used dept-store card we'd taken a couple of years earlier so that we could knock $50 off the price of my new mixer. That was our three. I'm glad we stumbled into those last two.


  1. Switch your gas bill to his name. We just got a copy of our own credit report, and lo and behold, Wisc. Natural Gas is on there, from way back.

  2. I recommend getting a Discover Open Road card. It gives you 5% back on the first $100 you spend on gas/car stuff every month. Plus the usual 2% on everything else. When you pay it back in full every month, it's nice to be able to actually use that money for something. You can even put $20 of that money back into a $25 Borders card... if one is so inclined to do so. :)


  3. We use Discover as well and earn cashback: turn in $20 cashback and get $30 Omaha Steak gift certificates. They have great specials at Christmastime! There are good options available Susan. Sorry he ran into that glitch, but now you know for the sake of the rest of your kids.

  4. I lived at home my first two years of teaching and saved up my money to buy a house. When I went to get a loan, they said it was bad for my credit rating that I had paid off my school loans and my car and I had one credit card but I always paid it off. They told me to go charge several hundred dollars on my credit card and come back. So I went and charged a new door for my house and some furniture. When I had those on my credit card bill they easily gave me a mortgage. It's a crazy system. We now have credit cards in both of our names and pay them off every month. One is a AAA Visa card that gives 5% back for gas and they also send vouchers that pay for our AAA membership every year. I do think we have to be careful as many of our utilities are in the church name even though we pay them.