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Which Credit Cards Help Authorized Users Build Credit?

Are you trying to build credit, yet are unable to be approved for a new account? Its the classic chicken and the egg paradox, and there are only a few ways out of it.

One of the most popular techniques for building credit is to become an authorized user on another persons credit card account. The consumer credit scoring formulas allow the primary account holders good credit to essentially rub off on authorized users, which can help to increase the credit score of a person with a limited credit history. But one catch is that not all credit cards will help authorized users to do this.

Tips to improve your score as an authorized user

When using this technique to improve your credit score, the most important factor is going to be the credit score of the primary account holder. The primary account holder should not only have a strong credit score, but it is vital that they maintain their score by making all of their payments on-time. This advice applies not just to the credit card that you are an authorized user on, but all of the other persons accounts such as mortgages, car loans, and other credit cards.

As your credit improves, you can apply for a new account as a primary cardholder, which will help to build your credit even more than being an authorized user. And finally, it is a good idea to be removed as an authorized user once you are able to open your own account, as you will not want to risk having your credit score be affected if the primary account holders should change.

Knowing which cards help authorized users

To benefit from becoming an authorized user, the card issuer must require that the account holder supplies the Social Security number of the authorized user. Without that number, there is no way for the account to link the name of the authorized user to his or her credit report.

Here are some of the cards from major issuers that can help authorized users to build their credit:

Capital One Platinum

Capital One requires a Social Security number when adding an authorized user, and it has relatively low requirements for being approved for a new account. The Capital One Platinum card is offered to cardholders with just fair credit, and it has a number of benefits. For example, it features Capital Ones Credit Tracker so you can learn how your decisions affect your credit score. Cardholders get access to a higher credit line after making your first five monthly payments on time. It also has no annual fee and no foreign transaction fees.

Citi ThankYou Preferred

The Citi ThankYou Preferred card is a great entry level card that offers plenty of rewards and benefits. New cardholders receive 12 months of interest free financing on both new purchases and balance transfers, with a 3% balance transfer fee. New applicants also receive 20,000 bonus points when they use their card to spend $1,500 within three months of account opening. Customers earn one point per dollar spent on most purchases, and double points for spending at restaurants and on entertainment. When you add an authorized user to your Citi card, remember to specifically request to use that persons Social Security number in order to help their credit score. There is no annual fee for this card.

Barclaycard Rewards MasterCard

The Barclaycard Rewards MasterCard is specifically designed for people with average credit, yet it is also a great card to add an authorized user. This card offer one point per dollar spent on most purchases, and double points for every dollar spent on gas, groceries and utilities. When you add an authorized user to your Barclaycard, remember to specifically request to use that persons Social Security number. There is no annual fee for this card.

Blue Cash Everyday from American Express

American Express requires a Social Security number for all authorized cardholders, and it even gives each cardholder a card with a different number on it. Although its unclear if having a separate card number makes a difference, this feature does allow Amex and the account holder to track the spending of the authorized user. Finally, authorized users can create their own online account profile with American Express, and link their card to it, even though they are not a primary account holder. This can enable American Express to target authorized users for pre-approved credit card accounts as a primary account holder, which will further increase their score.

The Blue Cash Everyday is an Amex card that offers great cash back rewards with no annual fee. New cardholders receive a $100 statement credit after spending $1,000 in purchases within three months of account opening. Cardholders also receive 3% Cash Back at US supermarkets (on up to $6,000 in purchases per year, then 1%), 2% cash back at US gas stations and at select US department stores and 1% cash back on all other purchases. In addition, new accounts receive 15 months of interest free financing on both new purchases and balance transfers, with a 3% balance transfer fee.

By understanding which credit cards will help authorized users to build credit, you can choose the best possible card for your needs.



Research and Markets: Insight Report 2015: Digitization in Lending - The ...

DUBLIN--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/research/bl9wvf/insight_report) has announced the addition of the Insight Report: Digitization in Lending report to their offering.

The Insight Report: Digitization in Lending analyzes the effect of digitization, emerging trends and competitive landscape of the lending industry. The report also discusses in detail the drivers of digitization for financial institutions and how they are using it for improving operational efficiency and customer experience.

With significant adoption of digital channels by customers, financial institutions are compelled to provide the convenience of anywhere, anytime banking to customers. Although digitization has transformed the transactional banking process, it has not been fully adopted in lending process.

Many online lending companies and non-bank lenders have emerged to capitalize on the inefficient lending process of banks. The growth of these companies also demonstrates that customers are looking for more convenience, which digitization can provide. The significant rise of non-bank lenders has led banks to invest more in digital technology, and form partnerships with them to remain leading operators in the lending market.

Key Highlights:

- Manual loan and mortgage application processes make the lending system slow and expensive.

- Digitized loan applications reduce paperwork and manual errors involved in the process.

- As digital banking grows worldwide, customers require reliable and seamless loan application and disbursal over multiple channels and devices.

- Digitization of lending is likely to provide the most cost-effective solution for reducing increasing compliance costs due to enhanced regulations.

- Enhanced adoption of digital channels, and inefficiencies in the traditional bank lending system have led to the launch of online lending platforms.

- Financial institutions have encountered various challenges in digitizing the lending process. Lack of sophisticated software solutions, concerns over compatibility of new systems with legacy systems, costs of transformation, regulatory compliance, and management and budget restrictions have all deterred banks from digitizing the lending process.

- With the increasing presence of alternative lenders, banks are investing in technology, forming alliances with emerging financial technology companies, and adopting new credit scoring methodologies.

Key Topics Covered:

1 Executive Summary

2 What is Driving Digitization in Lending?

2.1 Growing Need for Enhanced Customer Experience

2.2 The Quest for Operational Efficiency

2.3 Impact of Changing Competitive Landscape

3 Digital Transformation of Lending in Retail Banks

3.1 Front-End Digitization

3.2 Back-End Digitization

4 Challenges in Digitization of Lending

5 Case Studies

5.1 Enhanced Efficiency with Paperless Loan Processing by US Bank

5.2 First Internet Bank - the Digital Platform of Lending

5.3 Bank Dhofar - Automation of Loan Origination Improved Efficiency

5.4 Zopa - a Pioneer in Peer to Peer Lending

5.5 HDFC Bank - Banking on Digitized Personal Loan Product

6 The Way Forward for Digitized Lending

7 Appendix

Companies Mentioned - Partial List

- HDFC Bank

- Google

- mBank

- Westpac

- Wells Fargo

- US Bank

- First Internet Bank

- Association for Information and Image Management

- Thomson Reuters

- Consumer Financial Protection Bureau

- Astoria Bank

- Wolters Kluwer Financial Services

- Bank of America

- BAI Banking Strategies

- PwC

- Zopa

- Lending Club

- Funding Circle

- Faircent

- Quicken Loan

- PayPal

- Amazon

- Square

- Goldman Sachs

- Kueski.com

- Royal Bank of Scotland

- Santander Bank

- BBVA Compass

- Tesco Bank

- United Overseas Bank

- State Bank of India

- Barclays Bank

- Citibank

- Commercial Bank

- Bank Dhofar

For more information visit http://www.researchandmarkets.com/research/bl9wvf/insight_report



Could Your Social Media Footprint Step On Your Credit History?

In December 1912, financier John Pierpont JP Morgan testified in Washington before the Bank and Currency Committee of the House of Representatives investigating Wall Streets workings of the time.

The fascinating record produced from the testimony called him the uncrowned king of finance and recounted this exchange between Morgan and the committees lawyer, Samuel Untermyer:

Untermyer: Is not commercial credit based primarily upon money or property?
Morgan: No, sir, the first thing is character.
Untermyer: Before money or property?
Morgan: Before money or anything else. Money cannot buy it.

Further on, Morgan also produces this financial proverb material: A man I do not trust could not get money from me on all the bonds in Christendom.

A century later, this memory has found new life in a growing number of stories about alternative ways of calculating credit scores, apparently promoted by the co-founder of a startup called Lenddo.

Its a modern-day iteration of the idea of character as a commercial value: companies going online to try to figure out your financial potential from posts and connections from Facebook, Twitter and, yes, LinkedIn (professional contacts there are especially revealing of an applicants character and capacity to repay, another creditworthiness startup founder told the Economist, in 2013).

The latest wave of coverage comes from a story in the Financial Times about FICO, the credit scoring company, headlined: Being wasted on Facebook may damage your credit score.

The FT says FICO is developing a way to price loans to millions of people who have historically been off the grid and so the firm is looking at data on a spectrum from credit card repayment history to information volunteered on Facebook or other social media.

If you look at how many times a person says wasted in their profile, it has some value in predicting whether theyre going to repay their debt, FICO CEO Will Lansing is quoted in the FT as saying. Its not much, but its more than zero.

If you get the impression that FICO might use your Web posts to dock your credit scores, youre not alone. But heres a clarification from FICO spokeswoman Christina Goethe:

The headline about social media posts created a misperception. FICO is not utilizing Facebook data, or any other type of social media data, in calculating FICO Scores. Mr. Lansing was talking generally about the fact that different types of data have different levels of predictive value.

What FICO is doing is piloting a new type of score, called FICO Score XD, which would add telecom and utility bills (from another credit reporting company Equifax) and property and public records (from LexisNexis) to its calculations to score people who cant be scored otherwise, for instance those without a credit history.

Goethe, in an email, explains how it works:

FICO Score XD is currently designed to only score consumers that are not scorable with traditional credit data. The algorithm checks to determine if a traditional FICO Score can be generated first, and if it can, the traditional score is returned to the lender. If it cannot, FICO Score XD provides a second chance to get approved. The goal of FICO Score XD is to expand access to credit.

OK, but what if FICO, or Experian, or Equifax, or TransUnion, or their smaller rivals do decide to take social media data into account in building your file, and not just to prevent fraud? Their consumer reports can be used not just for loan and credit card decisions, but also hiring, insurance and housing.

Knowledge Is Power

The first thing to know is this: You have to be told if information from your file has been used against you.

Bob Schoshinski is an assistant director in the privacy and identity protection division at the Federal Trade Commission. He says if your consumer credit data causes a bank, an insurer or landlord to reject your application or give you worse terms than you could have gotten, they have to give you whats called an adverse action notice.

Its the kind of notice, Schoshinski says, that explains: We rejected your application or gave you a worse deal because of your credit report or score, and heres where we got the report or score and here are the major factors that determined our decision.

Employers who want to peek in your background through a credit or consumer report have to give you even more of a heads-up with a pre-adverse action notice, Schoshinski says, in case potential hires want to dispute anything on their report before a decision has been made.

And thats another thing you can do under the Fair Credit Reporting Act: Make sure that your information is correct, wherever it may have been collected. Consumer reporting agencies must investigate disputed information and then correct or delete things that are wrong, incomplete or unverifiable.

Generally speaking the FCRA is neutral as to what kind of data a credit reporting agency, or a lender, or an employer uses, including social media, Schoshinski says. You have to have procedures that assure a maximum possible accuracy of the information youre providing.

The FCRA also prohibits credit reports from including negative stuff thats more than 7 years old (for instance, arrests) and leaves no room for shady uses of credit reports: If a bank, insurer, employer or landlord doesnt acknowledge that their decision stemmed from a credit report, then theyre violating the law, Schoshinski says.

When Youre Found Online Directly

Things get murkier when the social media data is collected not by consumer reporting companies, but banks/employers/property owners/insurers themselves. Those instances are not overseen by the FCRA and are guided by other anti-discrimination laws and ethics standards (for example, fair housing laws), whose relationships with social media are still getting sorted out, too.

NPRs Yuki Noguchi has delved into the thorny issue of employers sleuthing on social media accounts of potential new hires. She found hazy rules of what hiring folks can do with the information the a job seeker makes publicly available, especially given that discrimination can be hard to pinpoint when its based on intangible and sometimes subconscious impacts of things like scanning a Facebook page.

The Equal Employment Opportunity Commission took on the topic in March 2014, issuing a recap press release with this note from panelists observations: To the extent that employers conduct a social media background check [to identify and recruit good candidates], it is better to have either a third party or a designated person within the company who does not make hiring decisions do the check, and only use publicly available information.

Spokeswoman Kimberly Smith-Brown says that workshop remains the EEOCs latest formal action on the topic of social media.

The FTCs Schoshinski says: Our main concern is about consent. If someone wants that information to be out there and wants to put information out about themselves, through social media or otherwise, then that shouldnt be a concern.

But if theres information that someone either doesnt know is going to be put out there or hasnt been told if they enter information here, its going to be shared with thousands if not millions of people, then that can become a problem.

China's 'citizen score' ideas offer a glimpse of what your credit score could ...

Imagine a “credit score” that didn’t measure the likelihood that you will pay bills, but instead the likelihood that you’ll be a troublemaker. To your town, or your company or your government.

Your “citizen score” would drop if you posted anything negative on social media — or if any of your friends posted anything negative. Your purchase habits would also be tracked and scrutinized. Buying video games would hurt your score, for example.

(This story first appeared on Credit.com. Read it there.)

As with credit scores, any drop in “citizen scores” would have real consequences. Citizens with lower scores would have a harder time getting paperwork from the government, such as travel visas.

And the scores are public. Anyone can see your numeric reputation. Citizens wouldn’t be able to avoid comparing themselves to one another, and the social consequences of that would be obvious. Who wants to date or hire someone who can’t be trusted to leave the country?

This Orwellian vision is at the moment, fortunately, just a product of an active imagination — but a very informed one. Jay Stanley is a policy analyst for the American Civil Liberties Union (ACLU) and recently wrote a piece speculating on the consequences of efforts by the Chinese government to launch a credit scoring system that utilizes many of the data sources (including social media accounts) referenced above.

‘Authoritarianism, Gamified’

“The more I learn about it, the more nightmarish it seems,” he wrote. “China appears to be leveraging all the tools of the information age — electronic purchasing data, social networks, algorithmic sorting — to construct the ultimate tool of social control. It is, as one commentator put it, ‘authoritarianism, gamified.’ “

Violent oppression is passÃ, he wrote, and it is being replaced by far more sinister and sneaky ways of controlling a population.

“(It is) much subtler and more effective to pressure people, to turn the exercise of power from a hammer, striking the body politic from without, into a drug, which permeates social life from within and shapes it in the desired directions,” he wrote. “In today’s world, all the tools are in place to allow a government to do just that in stunningly subtle yet powerful ways, and the Chinese government appears to be wasting no time in exploiting that potential to the fullest.”

Fortunately, other observers say Stanley’s dire description of China’s credit score adventures are at the very least premature, and perhaps exaggerated. TechinAsia.com reports that Stanley has conflated features of credit scores recently begun by private corporations and a government credit score program that doesn’t become mandatory for citizens until 2020.

On the other hand, there’s no reason such a system might not eventually emerge — a “credit” scoring system that rewards sincerity with social perks — and no reason the Chinese government wouldn’t do it, wrote Charlie Custer.

“It seems likely that some of the ACLU’s fears might eventually come true,” Custer said. “If the government wants its credit system to enforce social morality, then collecting data on everything from political activities to purchase histories might well be on the table. And there’s little in the Chinese government’s history to suggest it would be unwilling to construct such a credit system and make it mandatory.”

Could the US Digitize Morality?

But that’s China. Stanley’s real point was this: Could something similar happen in the US? While it’s hard to imagine an electorate that won’t tolerate gun owner registration tolerating the creation of something like a “citizen score” here, one shouldn’t dismiss the Orwellian notions out of hand. In the US, consumer advocates are more worried of the offender being a dot-com than a dot-gov.

Just last month, a firm working on an app got a round of pre-launch press by revealing that its forthcoming software would be something like a “Yelp for People.” Everyone — members or not — would be allowed to rate everyone else, essentially creating a massive gossip database. After backlash, the firm publicly backed off its plans a bit.



Social media activity might affect your credit score

FICO, one of the nations largest credit rating companies, recently expanded the ways it tests a consumers creditworthiness, including looking at information posted on social media sites such as Facebook.

The company, creator of the FICO credit scoring system, is also looking at sifting through smartphone records, according to various media reports.