Advise concerning wife's 100+ point score drop

[Anonymous]

Hi, I've been helping The Mrs get her credit score up by making a secondary user on all of my cards. I don't have the best credit, but I have 12 cards totaling $53K with a utilization of 22% (cruise & Lasik making up a chunk of it) I finally got her score up from about the 630s to the 690s so I decided it was time for her to get her own cards & I'd make myself the secondary user on cards she's approved for. First card she was approved for was Cap1, with a CL of $2K, which they just raised to $2,500. Next was Discover, they gave her a CL of $11K (which really upset me because the highest limit I got on any card is $7,200) I really want us to get our finances in order so we saw a fiduciary less than a month ago & agreed that I'll be taking over all of the finances & making the decisions. 

Anyway she has $70K in debt from school & I'm not sure what happened, but I was looking up her score & it was in the 540s. I was shocked! I think she may have missed the 1st of her payments because she hasn't made a payment since she graduated. The total in missed payments was $300, but it was like 20 lenders. I read that credit card companies can lower your CL or even revoke your card if they feel you're a risk. Is there any chance this will happen to The Mrs.? Yes I'm worried about her score, but I'm also worried about mine as I'm a secondary user on both of her cards. I feel really bad because I agreed to take over the finances & a couple of weeks later this happens. Any advise that can help us out? We make a little over 110K total, she just started working a year ago.

[Anonymous]

First step is to contact the lenders, get the loans back in shape and caught up, and see if they will remove the late reports - that will go a very long way toward rehabbing her scores.

Next, keep her cards reporting zero balances except for one. Let that card report a small $5-10 balance each month, and pay it off after the statement cuts. Maintain this practice going forward to maximize everything you can for her scores.

As for her being an AU on your cards, get your balances down as low as you can, ideally in the same way that hers will be (as described above). Do you have any cards with decently long history? Helping her as an AU works better the longer the history with the account is. Her cards supporting you as an AU will benefit you so long as the balances are very low - that Disco at $11k would be good.

Other than this, keep hammering away at the loan companies to try and get those lates removed once the loans are current, and work on any other derogs you two have, let time work for you, and scores will improve. Good luck!

[Anonymous]

I didn't want to get in the mess of credit card debt so I never applied for one til 2 years ago. I'm an AU for her Chase card that is almost 3 years old. It has a $2K limit & a .99 recurring charge & it's only used for that. I think it's being autopaid before reporting because I've never seen a balance on Credit Karma. 

I'm already doing the small balance with her Cap1 card by having Netflix auto pull every month & I got the $11K Disco paying our phone bill, but I can move some things around, probably start paying a couple of bills from my checking account. 4 of the cards she's an AU for have a $0 balance. Never thought about calling the companies but I'll do so first thing when I get home. I'm expecting our tax return this week & will inquire what's needed to get caught up. (I wanted to use that money to put a dent in on my Care Credit card) I think the loans are the only derogs "we" have besides for a late fee from the Chase card back in 2017 (which is the reason I got involved in her credit) I'll ask about getting that removed too if it's not too late. Thanks a lot.

[Anonymous]

OP, you mention "score" in the thread title and in the body of your post, but I don't see any mention of your score source.  I do see you referenced Credit Karma in one place, so I'm hoping that the scores you're referencing aren't from there, as they're quite irrelevant since they're not FICO scores.

You did say though that the major issue is many missed payments across many accounts.  That's the #1 sign of default risk from the lens of any lender; basically the largest slice of the FICO pie, Payment History (35%) is in the worst place you can be.  Everything else is quite secondary to that really in terms of risk assessment.  To answer your question about receiving AA from lenders in the form of CLDs or account closures, yes, it is a definite possibility.  The best way to prevent that is to never miss another payment and then on top of that keep utilization as low as possible. 

[Anonymous]

Hi Brutal, I saw your post on Friday so I got her FICO score. The score mentioned in my OP was through CK, her FICO score through Experian is about the same.

Yea, her school loans all hit her at one time, it's 10 total saying she's 30 days late, but it's the same lender. We called on Friday & they said once she's current they'll remove the late notice, but I want them to email her stating that so we're going to call back tomorrow & set up auto payments going forward. Thanks.

[Anonymous]

Good idea planning on getting that in writing prior to making those payments.  While lenders will rarely pull a bait and switch on you, it does give you insurance that they'll make good on what they say.  Getting all of those lates removed will definitely help.