Does AU help someone build their credit?

[Anonymous]

In the process of helping my fiancee rebuild her credit. Her scores are in the high 500s/low 600s. The greatest hinderance to her credit is a loan that she cosigned on that is in collection. We're biting the bullet and paying it off ourselves (it was a $1200 student loan she cosigned for a close friend, friend never paid, now in collections for almost $5k... obviously, they aren't friends anymore.) She also has a few 30-day lates from about three years ago. Otherwise, her profile is fairly strong and I think her scores could bounce back fairly quickly once we get some positives rolling in every month. Our goal is getting her credit-worthy for a mortgage we're hoping to open next year after we get married.

I've helped her to send out GW letters regarding the lates and we're opening three secured cards (CapOne, Citi & Discover) in her name that will hopefully graduate.

I've personally recently been approved on several prime cards and am wondering if adding her as an AU help build her score? There is zero concern with her responsibility, and our finances are already partially combined for mutual expenses as we live together. Anything else I should be doing? Would the AU prove beneficial? Any advice on the cosigned loan? 

[adamkingadam]

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@Anonymous wrote:

In the process of helping my fiancee rebuild her credit. Her scores are in the high 500s/low 600s. The greatest hinderance to her credit is a loan that she cosigned on that is in collection. We're biting the bullet and paying it off ourselves (it was a $1200 student loan she cosigned for a close friend, friend never paid, now in collections for almost $5k... obviously, they aren't friends anymore.) She also has a few 30-day lates from about three years ago. Otherwise, her profile is fairly strong and I think her scores could bounce back fairly quickly once we get some positives rolling in every month. Our goal is getting her credit-worthy for a mortgage we're hoping to open next year after we get married.

I've helped her to send out GW letters regarding the lates and we're opening three secured cards (CapOne, Citi & Discover) in her name that will hopefully graduate.

I've personally recently been approved on several prime cards and am wondering if adding her as an AU help build her score? There is zero concern with her responsibility, and our finances are already partially combined for mutual expenses as we live together. Anything else I should be doing? Would the AU prove beneficial? Any advice on the cosigned loan? 

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If you have some older credit accounts, It would help her aaoa but newer accounts would bring that down.   Personally, I would try and clean up her reports as much as you can first.  Does she have any credit cards in her name?  Also, what is your UTI? If you add her to your accounts with high UTI, it wouldnt do much good for her overall credit profile.

[Gmood1]

The older the accounts you add her to the better.
Also consider a $500 shared secured loan through Alliant. Use the technique mentioned in one of the forums here. That along with 3 revolving accounts with good payment history and utilization will do wonders for her credit.

I've been doing something similar for my GF.
She was just approved for her first non secured card. She went from a $200 secured card to a SL $17,300 card at 9.9%. Being an AU on good accounts makes a tremendous difference! I've seen it first hand.

[Anonymous]

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If you have some older credit accounts, It would help her aaoa but newer accounts would bring that down.   Personally, I would try and clean up her reports as much as you can first.  Does she have any credit cards in her name?  Also, what is your UTI? If you add her to your accounts with high UTI, it wouldnt do much good for her overall credit profile.

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Thanks for the info. My AAoA is 3.75 years, that's after having recently opened five new accounts. I never carry a balance and always PIF so my revolving credit utilization is at 0% (total CL about $30k). I just opened a CapOne Secured in her name, and am planning to also do Citi & Discover secured cards so she will be using the three-account method with cards that have the potential to graduate.

Do installment loans factor in to utilization? I have three student loans and one auto loan, all in good standing. Does the proportion of debt outstanding compared to what I originally took out factor into the UTI calculation?

[Anonymous]

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@Gmood1 wrote:
The older the accounts you add her to the better.
Also consider a $500 shared secured loan through Alliant. Use the technique mentioned in one of the forums here. That along with 3 revolving accounts with good payment history and utilization will do wonders for her credit.

I've been doing something similar for my GF.
She was just approved for her first non secured card. She went from a $200 secured card to a SL $17,300 card at 9.9%. Being an AU on good accounts makes a tremendous difference! I've seen it first hand.

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Thanks for your insights. The secured loan is a very good idea I hadn't thought of. We're in the process of getting her the 3 revolving accounts through secured cards as well. Is your GF new card through Alliant? I just opened an account with PenFed, but I've heard great things about Alliant as well. Do you have a recommendation? I know PenFed doesn't like to extend credit with any lates or collections on the report -- regardless of score.

[Gmood1]

Her card is through Navy Fed. Alliant is on the conservative side. I wouldn't try them for a CC unless the reports are squeaky clean with few inqs. Navy Fed approved her with a 604 TU FICO 8. She has roughly 10 CO's. Some of which were student loans now paid off and a bunch of late payments. When the secure loan hit her reports after the 4 th of this month. Her scores jumped an avg of 15 points across the board.

She's been on my Navy Fed CC nine months as an AU. She just became a member two months ago.

[Anonymous]

Great info, thanks for sharing. We'll look into NFCU.