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Advice on Whether to Use Wife's Credit to Improve your Credit Score - The Bills.com Blog
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Advice on Whether to Use Wife's Credit to Improve your Credit Score
Monday, Jan 26, 2009
Question: I'm 34 years old, own a business that grosses over $1,000,000 a year, make decent money, married, etc. However, to my name (credit-wise), all Ive got is one First Premier Bank credit card with a $300 limit (for which I pay an annual fee, montly fees and all kinds of fees) and a Capital One credit card with a $750 limit. Ive had them each for over a year and have always kept them paid in full on time. I got them for the sole purpose of building credit. Ive also got two leased cars, a Citi-AAdvantage credit card with a $6500 limit and two business credit cards with $5000 limit and $6500 limit. The problem is, all of those are in my wife's name (she is my business partner as well). As you can imagine, she's got excellent credit. I, however, do not, which is a result of financial irresponsibility in my youth that is still affecting me today. We've always applied for all new lines of credit (cars, cards, business, personal) with my wife as the guarantor because she has better credit and was more likely to be approved, etc. The problem is, the more we do this, the better her credit gets, but the more mine doesnt improve. How do I get so that my credit can be steadily improving as well? I dont want to open too many more credit cards (or any) because we have enough credit and are making good use and properly managing what we already have. Is there a way for me to attach myself somehow (with my wife's permission and assistance, of course) to those lines of credit (leases, cards, business cards, etc) so that as they improve her credit, they improve mine as well? Or do I have to simply get more credit cards on my own and use them and slowly build from the ground up? I have become extremely financially responsible and manage our family and business money and credit perfectly, yet its doing nothing to improve my credit. Is there a way to parlay that into improved credit for myself as well, so that when my wife an I decide to try to get a mortgage, we'll both have good credit?
Answer: Thank you for visiting Bills.com,
and thanks for your question. A good way to use your wife’s good credit to help improve your credit profile would be to have her add you as an authorized user on several of her credit cards. Many credit card companies report the payment history on their cards on the credit reports of both the cardholder and any authorized users. If your wife makes you an authorized used on her credit accounts, her positive credit lines should appear on your credit report and hopefully improve your credit score. Reporting accounts on the credit reports of authorized users is allowed by federal law, despite the fact that authorized users are not legally liable for the debts. The purpose behind this law was to assist women, who in the past had a very difficult time establishing credit independent of their husbands, to use their husbands’ accounts to build their own independent credit rating. In your case, the wife is trying to help the husband, but the effect should be the same. Before deciding to which credit cards your wife should add your name, I encourage her to contact the card issuers to discuss their policies regarding credit reporting for authorized users to make sure you and she choose card companies that will report the account histories on your credit reports.
Please keep in mind that your past financial foibles, which are exerting a negative impact on your credit rating, will appear on your credit report for seven years from the date you fell behind on the accounts. Being added as an authorized user on your wife’s positive trade lines may improve your credit score, but the past missteps may prevent you from achieving a good credit rating for several years, depending on the severity
Please keep in mind that your past financial foibles, which are exerting a negative impact on your credit rating, will appear on your credit report for seven years from the date you fell behind on the accounts. Being added as an authorized user on your wife’s positive trade lines may improve your credit score, but the past missteps may prevent you from achieving a good credit rating for several years, depending on the severity
of your credit problems. The more time that passes from the date of delinquency, the less impact the old accounts will have on your score; hopefully the new accounts appearing on your report will help you rebuild your score over time. However, you may not see a sudden jump in your credit rating simply by being added as an authorized user on your wife’s credit cards.
In regard to your wife’s credit rating, adding you as an authorized used on her accounts should have no impact on her credit score. Her account information will appear on your credit report as an authorized user, but your derogatory items should not appear on her credit profile. If you are concerned about your negative credit affecting your wife’s credit rating, I encourage her to periodically review her credit reports to make sure that none of your accounts are appearing improperly on her credit reports. She can obtain a free copy of her credit report from each of the three major credit bureaus–Equifax, Experian, and TransUnion–once every twelve months by visiting www.annualcreditreport.com. I also encourage you to review your reports periodically so you can dispute any inaccurate derogatory items that may be damaging your score, and to make sure that your wife’s accounts are being reported as expected. The Federal Trade Commission offers a guide to disputing credit report errors, available at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.shtm .
If you would like to learn more about credit, credit reporting, and credit scores, I invite you to visit the Bills.com Credit Help page at http://www.bills.com/credit/.
I wish you the best of luck in your efforts to rebuild your credit rating and hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com/blog/
In regard to your wife’s credit rating, adding you as an authorized used on her accounts should have no impact on her credit score. Her account information will appear on your credit report as an authorized user, but your derogatory items should not appear on her credit profile. If you are concerned about your negative credit affecting your wife’s credit rating, I encourage her to periodically review her credit reports to make sure that none of your accounts are appearing improperly on her credit reports. She can obtain a free copy of her credit report from each of the three major credit bureaus–Equifax, Experian, and TransUnion–once every twelve months by visiting www.annualcreditreport.com. I also encourage you to review your reports periodically so you can dispute any inaccurate derogatory items that may be damaging your score, and to make sure that your wife’s accounts are being reported as expected. The Federal Trade Commission offers a guide to disputing credit report errors, available at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.shtm .
If you would like to learn more about credit, credit reporting, and credit scores, I invite you to visit the Bills.com Credit Help page at http://www.bills.com/credit/.
I wish you the best of luck in your efforts to rebuild your credit rating and hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com/blog/
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