topic Re: Parents have Credit Cards on my name screwing my Credit Score in Relationships and Money

Parents have Credit Cards in my name screwing my Credit Score

nekosun — Sun, 20 Feb 2011 06:51:54 GMT

Hi. I really need help, coz it is getting frustrating and effecting my relationship with my parents - they have 3 credit cards in my name (It is NOT my debt, it is theirs, but with my name on the paper. They also make the payments). So, I have almost $100,000 outstanding balance ($33,000 on credit cards and $67,000 on school loans). Having this much debt, plus I missed a couple of payments on 2 of my school loans, my Credit Score is really low. I do my best to improve my Credit Score, putting my all to lower Utilization Ratio, but it does not help because the part my parents owe is 3 times greater than all of my credit cards together.

In my name, they have $25,000 outstanding balance with 88% Utilization Ratio on 3 cards, I have 5 credit cards with $8,000 balance and 60% Utilization Ratio. My parents pay minimums only on the cards, always in time. But creditors keep reducing credit limits on 2 cards, and the 3-d card is closed with $4,000 balance on it. Parents can't (don't want) to pay extra on the cards. I hardly convinced them to pay $100 over the minimum on the card that has 100% utilization ratio and $14,000 balance.

I got married last year, and we have dreams/plans, but everything crashes into the debts we have (even though we don't owe 3/4 of it!). I want these cards off of my hands. I talked to my parents many times, but "there is nothing more they can do". I tried to google what we can do to put the debt from my name to theirs, but couldn't find anything. Thought about Borrowing against home equity, but they live in a mobile home (info I found: hard to get a loan for it). If you guys have any ideas or suggestions, I would be more than happy to hear them. Any your help will be GREATLY appreciated!

Re: Parents have Credit Cards on my name screwing my Credit Score

haulingthescoreup — Sun, 20 Feb 2011 06:31:33 GMT

Why are your parents making payments on cards that are in your name? (I missed this part.)

Were they unable to get their own cards, and you let them open cards in your name, or is this for some debt of your own that they're helping pay?

Re: Parents have Credit Cards on my name screwing my Credit Score

nekosun — Sun, 20 Feb 2011 06:50:00 GMT

It is NOT my debt, it is theirs, but with my name on the paper.

Re: Parents have Credit Cards on my name screwing my Credit Score

nekosun — Sun, 20 Feb 2011 07:07:24 GMT

First step is to take those cards back. Tell your parents to use their own debit/check cards. You want to stop adding anymore debt on those CCs. If you don't mind can you post all of your CC balance and APR?

===========

I want to get rid of those credit cards/high balances in my credit reports (even if parents pay them). Having them hurts my score! I can't take them back, because they are not paid, and I can't pay them off. The cards are not used anymore (in the beginning the debt was over 35k) but balance is carried through the years (over 5 years now). APR is very reasonable, that's why they don't hurry to pay the cards off. I am desparate

Re: Parents have Credit Cards on my name screwing my Credit Score

john398 — Sun, 20 Feb 2011 07:36:13 GMT

They have commited identy theft

read this article http://money.cnn.com/2010/06/08/pf/parents_financial_abuses/index.htm

It happens a lot

Also here is some good advise:

You can dispute the charge on the card. If you didn't make the purchases and parents didn't have your permission, you are not required to pay. However, there are very short time limits and you may have let the time pass. Call the credit card company and talk to them. You don't have to snitch out your parents because you don't KNOW it was them unless you saw them do it.

Re: Parents have Credit Cards on my name screwing my Credit Score

laz98 — Sun, 20 Feb 2011 22:54:51 GMT

i guess an important question to ask yourself is why did you let them run the balances up so high?

Re: Parents have Credit Cards on my name screwing my Credit Score

mauve — Mon, 21 Feb 2011 01:15:07 GMT

Did you let them have these cards? Is it fraud? I'd shut down all of those cards RIGHT NOW.

Re: Parents have Credit Cards on my name screwing my Credit Score

nekosun — Mon, 21 Feb 2011 02:11:47 GMT

They are my parents, I can't put them in jail! if I shut down cards, it will hurt my score even more....

Re: Parents have Credit Cards on my name screwing my Credit Score

laz98 — Mon, 21 Feb 2011 06:04:58 GMT

OP, whether they are your parents or not, you are going to have to take SOME kind of action if you expect your situation to improve.

i'm not sure what your parents' situation is, that they need to use your credit cards. you still have not fully explained why your parents are using credit cards that are in your name. did you cosign for them? are you just letting them use your cards as if they belonged to your parents? i understand you don't want to hurt your parents, but they are hurting you & your wife's future by running all this debt up for you, regardless of whether they are paying it or not. it still shows up on your credit reports as your debt, not as debt your parents are paying for you.

your credit score is not going to get better if you don't get the balances down & you are losing available credit every time your credit limits get cut. closing the cards will hurt your score for now, but as long as you slowly pay the accounts down, your scores will go back up again. i don't think you should be worrying about your scores so much as worrying about this massive amount of debt that isn't yours.

Re: Parents have Credit Cards in my name screwing my Credit Score

O6 — Mon, 21 Feb 2011 09:57:05 GMT

nekosun wrote:
Hi. I really need help, coz it is getting frustrating and effecting my relationship with my parents - they have 3 credit cards in my name (It is NOT my debt, it is theirs, but with my name on the paper. They also make the payments). So, I have almost $100,000 outstanding balance ($33,000 on credit cards and $67,000 on school loans). Having this much debt, plus I missed a couple of payments on 2 of my school loans, my Credit Score is really low. I do my best to improve my Credit Score, putting my all to lower Utilization Ratio, but it does not help because the part my parents owe is 3 times greater than all of my credit cards together.

In my name, they have $25,000 outstanding balance with 88% Utilization Ratio on 3 cards, I have 5 credit cards with $8,000 balance and 60% Utilization Ratio. My parents pay minimums only on the cards, always in time. But creditors keep reducing credit limits on 2 cards, and the 3-d card is closed with $4,000 balance on it. Parents can't (don't want) to pay extra on the cards. I hardly convinced them to pay $100 over the minimum on the card that has 100% utilization ratio and $14,000 balance.

I got married last year, and we have dreams/plans, but everything crashes into the debts we have (even though we don't owe 3/4 of it!). I want these cards off of my hands. I talked to my parents many times, but "there is nothing more they can do". I tried to google what we can do to put the debt from my name to theirs, but couldn't find anything. Thought about Borrowing against home equity, but they live in a mobile home (info I found: hard to get a loan for it). If you guys have any ideas or suggestions, I would be more than happy to hear them. Any your help will be GREATLY appreciated!

I'm sorry about the situation in which you find yourself and hope that a way can be found to solve it to everybody's satisfaction.

You haven't mentioned whether you allowed your folks to open credit accounts in your name or if it was done without your knowledge. However, even if it was done without your knowledge, dropping a dime on your parents -- and make no mistake about it, reporting the accounts as not yours is very likely to cause repercussions for them -- may cause you more harm than good.

First of all, going from 88% utilization to 60% utilization may not even have a significant impact on your credit score. 60% is still considered very high.

In my opinion, the first thing you want to do is limit any further exposure you have to further, new problems. You'll need to have a frank and firm discussion with your parents and tell them that their cards must -- without exception -- be closed. Of course, they still continue paying on the current debt, but each and every card is unequivocally closed to new purchases, end of discussion. Then take possession of the cards, cut them up and call the card issuer to have the accounts closed. Keeping these cards open is just an accident waiting for a place to happen -- an invitation to have any balances paid down ultimately run back up again.

Any cards that are actually used by you should be kept under lock and key so nobody can access them and run up balances with them.

Then come up with a plan so that your parents can pay down their debt in the shortest time possible. On $25k in debt, just paying the minimum means that the debt will not be paid of for something like 12 years if you are lucky enough to have only a 13% APR and make a 5% minimum payback each month. If the APR is higher and the minimum payment lower, you could be looking at well over 30 years and cost you 6 times more than the original debt of $25k.

Make them stick to the plan.

The good news is that your credit score will improve almost overnight once the balances are near being paid off. The damage from late payments, however, is not that quick or easy to recover from. Ensure there are no more late payments and if at all possible try to goodwill those that do appear so that the creditor removes themm from your credit report.

Many people have recommended that you report the accounts as being unauthorized. Assuming you can successfully do this without committing fraud yourself, there's the very real possibility that your parents will face perhaps very serious problems. If that's something that doesn't worry you, and the accounts really were unauthorized, then fine. Still, I don't see your credit score improving any until your utilization is far, far lower -- especially considering your recent lates.

I am not at all certain how closing the accounts used by your parents will hurt your credit score. My understanding is that accounts closed with a balance not only still report for 10 more years, but that the balance and credit limit still calculate into your utilization. As far as I see, the only thing you accomplish is making sure that balances your parents stay down never end up increasing again. It also prevents interest rate hikes and credit limit decreases which will actually make your utilization even worse.

Re: Parents have Credit Cards in my name screwing my Credit Score

nekosun — Mon, 21 Feb 2011 21:12:33 GMT

They signed bankruptcy, couldn't get any loans for purchasing a mobile home, so they opened cards in my name. They did it because it was "the best for the family". And I did live in that mobile home while I was in school! They are NOT evil: they don't charge cards anymore (moreover, my dad cut the cards himself! after we talked), they do pay monthly in time, but minimums only - and it will take years to pay the debt off. It frustrates me that them not being able to manage their finances is effecting my family's future now. I am looking for a legal way to get rid of those cards. They are willing to put their name for those cards instead of mine, but non of us knows how. I hope it cleared the situation... I love my parents, they try to be good, but don't try well enough. Do you have any advices how to "rename" the debts, or transfer, or sell, whatever?

Re: Parents have Credit Cards in my name screwing my Credit Score

O6 — Tue, 22 Feb 2011 00:02:32 GMT

nekosun wrote:
They signed bankruptcy, couldn't get any loans for purchasing a mobile home, so they opened cards in my name. They did it because it was "the best for the family". And I did live in that mobile home while I was in school! They are NOT evil: they don't charge cards anymore (moreover, my dad cut the cards himself! after we talked), they do pay monthly in time, but minimums only - and it will take years to pay the debt off. It frustrates me that them not being able to manage their finances is effecting my family's future now. I am looking for a legal way to get rid of those cards. They are willing to put their name for those cards instead of mine, but non of us knows how. I hope it cleared the situation... I love my parents, they try to be good, but don't try well enough. Do you have any advices how to "rename" the debts, or transfer, or sell, whatever?

It's good to see that the only problem here may just be time.

From what you've stated, to even begin to claim the debt as not yours would entail fraud on your part. You knew what was happening and that pretty much means you explicitly approved. Do not get yourself into a bigger mess by trying to tell the credit card companies you are a victim of ID theft.

The only way to get these debts out of your name and into your parents' name is with the actual cooperation of the creditor. If the creditor feels your parents are a good credit risk, they may let you do something similar to adding them as co-applicants and then removing you from the account. Likely what the creditor will tell you is to let them apply on their own and if approved the debt can be transferred. Unless you are thinking about personal bankruptcy, I see no other way.

In a perfect world this would not be happening, but, as you stated, they are your parents and they do love you. Sometimes for all the right reasons the results come out wrong.

One thing I would be remiss not to suggest is that, crass as it sounds, you should make sure your parents have enough life insurance. If, heaven forbid, something were to happen then you are still stuck with the debt and then your situation would be more precarious -- high debt with reduced income with which to pay it.

Re: Parents have Credit Cards in my name screwing my Credit Score

IOBA — Tue, 22 Feb 2011 18:51:45 GMT

I want to say I had a similar situation, but it's not quite the same. I voluntarily loaned my parents one of my cc, with a 2k limit. It was for a specific purpose - to move with.

They quickly ran up the debt and started making payments on the card.

I think I asked for the card back, now that they were done with it, but it somehow never made it back to me.

They made payments. The address on the card was changed to their address so they could receive the statements and pay.

They missed a few payments. The cc sent out a demand payment letter. My parents not realizing the letter was from the cc, forwarded to it me. When I called to ask about the cc and payments, my mother was "Shocked" that I could even think she wouldn't make the payments! I said I have the letters from the cc - and I called them to find out what was going on. She then admitted she had missed only "one" payment. (Not true, but not going ot argue it, ya know.)

Long story short, 7 yrs later, they are still making payments. The cc closed the account because of the missed payments (several more happened).

When my mom found out that the card was closed, she decided she didn't need to make payments. I read her the riot act in a very calm voice and explained her actions had a DIRECT effect on me, my housing, my banking, my ability to feed and to clothe her grandson, and potential employment. I asked her to call up the cc and ask for a pymt plan. Explained the process to her.

She's making the payments now.

It still galls me that she has all the cash in the account to pay off the bill RIGHT now but refuses to! The card is closed, so no more charges can go on it. Potential credit score damage cuz she might miss a payment. I did tell her (heheehe) that if she was on a pymt plan that the cc would direct debit the money from her account every month and she wouldn't have a choice. She told them she didn't like their policy but would accept it. So they do that now.

Re: Parents have Credit Cards in my name screwing my Credit Score

haulingthescoreup — Tue, 22 Feb 2011 19:33:40 GMT

nekosun wrote:
They signed bankruptcy, couldn't get any loans for purchasing a mobile home, so they opened cards in my name. They did it because it was "the best for the family". And I did live in that mobile home while I was in school! They are NOT evil: they don't charge cards anymore (moreover, my dad cut the cards himself! after we talked), they do pay monthly in time, but minimums only - and it will take years to pay the debt off. It frustrates me that them not being able to manage their finances is effecting my family's future now. I am looking for a legal way to get rid of those cards. They are willing to put their name for those cards instead of mine, but non of us knows how. I hope it cleared the situation... I love my parents, they try to be good, but don't try well enough. Do you have any advices how to "rename" the debts, or transfer, or sell, whatever?

It's very admirable that you want to help your family. It looks like you got them through a tight spot, and now it's blown up on you.

I would go with O6's advice. I doubt that the lenders will take you off the cards. Generally, if someone wants to do this, the new person (your parents, in this case) would have to qualify on their own, and it doesn't sound like they're there yet.

For your sanity's sake, you might have consider this a gift to your parents that might never be fully repaid. Maybe they can make minimum payments to you, while you make payments on the cards. At least you'll know that they're being paid in a timely manner, and you can be reimbursed, at least partially.

This is one of the things that can happen when we try to help family (and friends) by essentially taking on their credit. Unfortunately, all that lenders care about is the person who applied for the CC, and that's who they'll go after. You, in this case. :(

Re: Parents have Credit Cards in my name screwing my Credit Score

beamMEup — Tue, 22 Feb 2011 19:38:57 GMT

haulingthescoreup wrote:

It's very admirable that you want to help your family. It looks like you got them through a tight spot, and now it's blown up on you.

I would go with O6's advice. I doubt that the lenders will take you off the cards. Generally, if someone wants to do this, the new person (your parents, in this case) would have to qualify on their own, and it doesn't sound like they're there yet.

For your sanity's sake, you might have consider this a gift to your parents that might never be fully repaid. Maybe they can make minimum payments to you, while you make payments on the cards. At least you'll know that they're being paid in a timely manner, and you can be reimbursed, at least partially.

This is one of the things that can happen when we try to help family (and friends) by essentially taking on their credit. Unfortunately, all that lenders care about is the person who applied for the CC, and that's who they'll go after. You, in this case. :(

Well put, HTSU.

Re: Parents have Credit Cards in my name screwing my Credit Score

O6 — Tue, 22 Feb 2011 23:38:12 GMT

haulingthescoreup wrote:

nekosun wrote:
They signed bankruptcy, couldn't get any loans for purchasing a mobile home, so they opened cards in my name. They did it because it was "the best for the family". And I did live in that mobile home while I was in school! They are NOT evil: they don't charge cards anymore (moreover, my dad cut the cards himself! after we talked), they do pay monthly in time, but minimums only - and it will take years to pay the debt off. It frustrates me that them not being able to manage their finances is effecting my family's future now. I am looking for a legal way to get rid of those cards. They are willing to put their name for those cards instead of mine, but non of us knows how. I hope it cleared the situation... I love my parents, they try to be good, but don't try well enough. Do you have any advices how to "rename" the debts, or transfer, or sell, whatever?

It's very admirable that you want to help your family. It looks like you got them through a tight spot, and now it's blown up on you.

I would go with O6's advice. I doubt that the lenders will take you off the cards. Generally, if someone wants to do this, the new person (your parents, in this case) would have to qualify on their own, and it doesn't sound like they're there yet.

For your sanity's sake, you might have consider this a gift to your parents that might never be fully repaid. Maybe they can make minimum payments to you, while you make payments on the cards. At least you'll know that they're being paid in a timely manner, and you can be reimbursed, at least partially.

This is one of the things that can happen when we try to help family (and friends) by essentially taking on their credit. Unfortunately, all that lenders care about is the person who applied for the CC, and that's who they'll go after. You, in this case. :(

I wish I had your finesse and way with words. :)

Re: Parents have Credit Cards in my name screwing my Credit Score

nekosun — Fri, 11 Mar 2011 18:34:16 GMT

Thank you everyone for your experience, support and advises. Might sound childish, but knowing that you are not alone - people are stuck in the same situation, and getting support from others - helps :)

And exceptional thank to O6 for: "The only way to get these debts out of your name and into your parents' name is with the actual cooperation of the creditor. If the creditor feels your parents are a good credit risk, they may let you do something similar to adding them as co-applicants and then removing you from the account. Likely what the creditor will tell you is to let them apply on their own and if approved the debt can be transferred. Unless you are thinking about personal bankruptcy, I see no other way."

I tried to negotiate with the creditors, but if you are a primary account holder, than there is no way to get out of it. Actually, they suggested the same - to open parents' own account and transfer the money. Glad to say, my parents agreed to do so, and as for now my debt is 3k less. Even though it is about 1/10 of the total revolving debt, I feel much better because my parents did at least something to help me out. And promised to pay extra "as much as they can".

So, if someone is in the similar situation, know that there is no way out, and you are very much stuck with it - doesn't matter how it happened, you are responsible as a primary account holder anyways. And of course, don’t get under this yoke by your own choice opening an account co-signing as a PRIMARY holder for anyone. Never know what future holds...

Thanks again for all your help! And hope that people reading this will learn a lesson

Re: Parents have Credit Cards in my name screwing my Credit Score

O6 — Sat, 12 Mar 2011 01:04:51 GMT

Great to hear that there is improvement! Before you know it, the debt will be a thing of the past.

Actually, though, in a sense you are very lucky. Not everybody in situations like this have parents that are as decent as yours and willing to work towards a positive outcome.

Re: Parents have Credit Cards in my name screwing my Credit Score

Comet21 — Tue, 06 Mar 2012 23:28:11 GMT

I had this happen to me. It is not that you allow your parents to do so, but who else has all of your information? Your parents can do whatever they want with your SSN. I looked at as a gift once I graduated from college and was working. I tried disputing but that will not work. I spoke with the CC on a number of occasions. Nowhere on record have they ever spoken with me, but they always asked do I know (Insert Mom)? To rebuild me credit I started slowly with Orchard Bank and Capital One. Then I was able to get a Peach Direct Merchandise Card. Then when I get married, my wife added me as an autherized user on all of her accounts. So from December 2005 to December 2007 my score jumped 200+ points. Long process but in December of 2007 I was able to get financed for a BMW(For My Wife) by myself and I qualified for a BMW CC during the purchase. We also purchased a home in March of 2008. I say all of that to tell you that I understand where you are coming from and you can recover from this. Make sure there are NO LATE PAYMENTS going forward.

Since then I qualified for an SBA Loan for a business I started, and I had to close the business. So I now have to start over in my Credit Building.

Re: Parents have Credit Cards in my name screwing my Credit Score

cassembler — Wed, 14 Mar 2012 03:58:59 GMT

haulingthescoreup wrote:

For your sanity's sake, you might have consider this a gift to your parents that might never be fully repaid.

The relationship sound like it's worth more than $X.