Q & A with Dottie Herman

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Q1 -  I just moved to NYC/the U.S. and it seems I have pretty much no American credit. I am planning on buying a co-op or condo in NYC within the next two years. How can I build credit with a purchase in mind?

A - This is an excellent question and it is great that you have given yourself a few years to build credit. Getting a secured credit card is a good way to begin building credit when you don't have any. There are many sites that offer credit cards for all types of consumers with varied credit histories. You can go to credit.com or creditcards.com and find the cards that will approve someone with NO credit history. Once you read the terms, decide to apply, and get your credit card, you can begin to use it. Try to keep your balances low and pay them off over a period of 3-5 months; showing an excellent payment pattern will certainly help.

See if you have any family or friends in the U.S. who have excellent 7 to 20-year-old credit, keep low balances, and always make timely payments. If you trust them and they are willing to add you on as an authorized user, this can be a great plus that will help you build your own credit. The older the credit, the better it will be for your scores. Being an authorized user will afford you the benefit of the old credit within 3-6 months, but you will not be responsible for the debt or account.

Once you have these two cards showing up on your credit, you can apply for a third card based on your current credit score. Buying your Fico score will not hurt your credit. Go back to the site that offers credit cards and apply for a regular card (use your current credit score category to pick the best card offer). The credit card sites offer cards based on score category as well.

Once you have 2-4 credit trade lines on your credit report, you will be in a much better position. Try to get all these cards within the first year so that you will have the second year to allow them to season. Remember, opening and closing credit can have a negative effect on credit scores. Once you have good credit scores, you want to be careful and strategic about deciding to open or close credit.

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Q2 - What type of loan (equity line of credit or loan) would be better to take out to pay off credit cards and do minor home improvements on an investment property? Total debt is $87,000 and have 2 credit scores over 710.

A - There are a few ways to use equity from your home to pay off debt and make home improvements. A home equity line of credit is a variable rate, and is tied to the Prime Index Rate. Or, a conventional loan with an equity refinance would provide a fixed rate. There are many mortgage options available depending on the product that will best fit your needs. It would be best to complete a complimentary consultation, which would involve a mortgage pre-approval to determine which product makes the most sense for your situation.

Please contact us if we can be of further assistance.

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Q3 - I was thinking about applying for a credit card that would give me more points and rewards for all the money I charge. What should I consider before doing this in regard to my credit scores?

A - Most consumers do not realize that simply applying for a credit card can hurt their credit scores. Every time a creditor analyzes and underwrites your credit card application, a copy of your credit report is pulled. This causes an inquiry, which can drop scores 2-5 points. If multiple or a series of credit card applications are filed, it can be viewed as extreme inquiry activity, and scores may drop by even more. Once the application is approved, the mere opening of the account can reduce scores by more than 80 points, depending on the actual credit profile, score, and age of credit. Therefore, making an educated choice and having a strategy before applying can help minimize damage to your credit while filling more of your needs as a consumer. It's essential to consider your credit score, credit card needs, and the timing of your short and long term goals before you take any action.

Based on the little I know about your specific credit, my advice to you would be to buy your Fico score and then browse credit.com to find the right credit card, or the one that you know will be approved based on your current Fico score. However, one more thing to consider is if you plan on getting financing in the next year or two, you might want to wait, since opening the new account will drop your scores.

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Q4 - Two questions: How do I go about getting email alerts for new Elliman listings for prewar apartments in Manhattan of more than 2,000 sq ft?

Second question: Is there an expert at Elliman that could recommend loft architects? Interested in innovative "movable walls" or ways to partition without destroying the open feel of a loft.

A - The easiest way to get email alerts is to register at Elliman.com. Here's a link: https://www.elliman.com/join-today. When you sign up, you will be prompted to enter your preferences for apartment type, size, price range and area. Once you have selected your criteria, you will be asked if you would like to receive email updates based on your preferences. Simply choose yes. We will start sending you daily updates of any new properties or price changes of properties you have previously viewed, including those of other firms.

For information on architects, you can visit the professional services directory of AIA New York: https://aiany.aiany.org/index.php?section=corporate-directory. Here you will find information on architects based on their particular expertise.

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If you have a real estate question for Dottie, please send it to; Reporters@WPCnews.com