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Tips to Re-build Credit Rating

My fiance has really bad credit, would it help him if I added him as an authorized user on my accounts?

I have really good credit and my fiance has really bad credit. We were wondering, now that he has caught up with all his past bills, can he begin to rebuild credit by being a rider on my credit cards? Would putting him on my accounts build his credit?

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Highlights

  • Take out a small loan and repay it.
  • Get a secured credit card.
  • Correct any errors on your credit report.

Adding your fiancé as an authorized user on your accounts will definitely help in rebuilding his credit. There are other ways to rebuild credit which I will explain below, but before you begin working to rebuild his credit rating, I encourage you to learn more about credit reporting and credit scoring; the Bills.com Credit Resources page, offers a wealth of information to consumers about credit and ideas about how to establish and maintain a positive credit rating.

You should start the process of rebuilding credit by pulling a copy of your fiancé’s credit report from each of the three major U.S. credit reporting agencies — Equifax, Experian, and TransUnion. Each of these bureaus maintains independent records regarding a consumer’s credit history, so it is important that you request a copy from each agency. Under federal law, you are entitled to a free copy of your credit report from each of the agencies once every 12 months; you can request your free copies by visiting Annualcreditreport.com.

Once you have obtained your credit reports, you should carefully review them to make sure that all of the information appearing on the reports is accurate. Ridding your reports of any old or inaccurate information, which may be damaging your credit rating, is a good first step in rebuilding your credit. If you find any credit listing that you feel is inaccurate, you should dispute the listing with the credit bureau on whose report the listing appears. Once you dispute an item, the bureau will investigate your dispute and contact the company that reported the information; if it finds that the listing in inaccurate, it will remove the listing from your credit report. The Federal Trade Commission offers a guide to disputing credit listings.

Your fiancé will also need to start establishing new credit accounts and making timely payment to build a positive payment history. Your payment history accounts for approximately 35% of your credit score, so creating a new payment record is essential to rebuilding your credit score. A good option to consider is a secured credit card. Secured credit cards require you to deposit cash in an account with the credit card bank and the credit line available on the card is equal to the amount of cash you have on deposit. This may sound strange; why would you not just spend your own cash? However, these secured credit cards report timely payments to the credit bureaus each month and should help you reestablish your payment history. In addition, small credit accounts, such as gas cards, can be a good option to build credit, but you should make sure that you pay off your balance each month to avoid finance charges and to prevent yourself from starting down the spiral of debt again.

As time passes, the positive impact of your new accounts will become stronger, thus allowing you to slowly rebuild your credit score. To learn more about credit scoring, I encourage you to visit the Bills.com Credit Score Information page.

I wish you the best of luck in rebuilding your fiancé’s credit rating, and hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

Bills.com

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