General Credit Topics

[skywalk22]

My wife and I will be purchasing our first home in about 12 months.  I currently have a credit score in the low 700s, while hers is in the low 600s.  We'd like to boost our scores as much as possible, obviously.  I have 3 credit cards in my name, all with good payment history, low balances, and decent limit amounts.  I'd like to add her as an authorized user to these accounts to help boost her score.  I've already confirmed that adding her as a "joint cardmember" will cause the banks to report these cards on her credit report as well.  My question is this:  By adding her to the 3 accounts all at once, is that the equivalent of her opening 3 new revolving credit accounts simultaneously?  Wouldn't this hurt her credit score?  Would we benefit from adding her to the accounts in 2-3 month increments?  Any advice you can provide would help immensely.

[Noah_Bodie]

New tradelines tend to push down a credit score. If you wife opened a CC on her own, it would have an open date of April 2007. Those can push down a score, particularly a lot all at once.

But, if these are established accounts, they will show on both you and your wife's report the same. If the CC was opened in November 1995, never late, has an $8K credit limit and a $300 balance, that will show on your wife report and she will benefit from it once the CC company reports. Takes upwards of a month to get on the AU's report. If you add her now, she should be on there by mid May.

[skywalk22]

Yes... two of the accounts (Citicards and Chase) are established (opened  in 2002 and 2004, respectively) with decent limits ($6,800 and $7,500)... one with 29% usage and another with a zero balance.... always paid, never late on both.  The third is a Discover card with a limit of $1,800 that was opened last year, and has a balance of ~$600.  I'm worried that adding the Discover card account might affect her score negatively, but according to what you're saying, it shouldn't.

Does anyone have an estimate (or guess) as to how much of a bump can she expect to see in her score?

[phunkdoktor]

My wife and I did the same thing. My wife's score was pretty high (in the 700's) and mine was pretty low (low 500's). She had a Visa, Discover and Store charge card that she opened when we got married. I was added as a joint user on the account later in hopes of improving my credit score. The cards are reported the same on my Fico score as they are on hers and they have really helped me. I went from the low 500's to almost 700 now. We have always paid on time and have had periodic credit limit increases from the card issuers. My score continues to increase as time goes on and we continue to use the cards and pay on time. It does take some time, so don't expect a quick turnaround, but if you sign your wife up as a joint user now, it should help. Also, even if her score doesn't increase that much, it will look good on her credit report that she has established credit with a positive history. Lenders sometimes look at more than just the score.

[Brammy]

While new cards may initially cause the scoreto go down due to decreasing the average age of credit history, AU accounts are not reported as new accounts since the entire history is reported to the bureau.  It makes a short history look much longer

[karenkkj]

After my bk, my mother was nice enough to add me as an authorized user to a couple of her credit cards.  While this probably helped my scores, I found it hurt me when I tried to apply for new credit.  I would go in and apply for a loan and the lender would say that my DTI was too high.  As we went over my credit report together and I pointed out the the two cards were my mothers, they didnt seem to care.  They said that it would be my responsibility to make the payments if my mother did not, so they would not overlook the balances or monthly payments.  I hope this helps any of you that may be considering the benefits of AU.

Karen

Loan officer in UT

[Californiagirl]

Normal rule of thumb is to have an account opened for no less than 2 years. Paid as agreed, picture perfect. Balance should be below 40% mark of credit limit. And no it would not hurt to add your wife to the Discover card. And yes it should take the creditors up to 60 days to report on her behalf.

[Brammy]

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karenkkj wrote:

After my bk, my mother was nice enough to add me as an authorized user to a couple of her credit cards.  While this probably helped my scores, I found it hurt me when I tried to apply for new credit.  I would go in and apply for a loan and the lender would say that my DTI was too high.  As we went over my credit report together and I pointed out the the two cards were my mothers, they didnt seem to care.  They said that it would be my responsibility to make the payments if my mother did not, so they would not overlook the balances or monthly payments.  I hope this helps any of you that may be considering the benefits of AU.

Karen

Loan officer in UT

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Sorry youare dealing with people who don't know what they're talking about.  Being an AU means you have NO responsibility for repaying adebt just that you are a user of the account.  Now if your mother added you as a co-borrower that's a different kettle of fish altogether.