How AU on spouse mortgage affects both our scores

[Anonymous]

Newlyweds considering "Authorized User" for mortgage.
Wife has owned home many years with solid score history (790-800).
My FICO 8 (790), but FICO 5,4,2 (745-750).
What is effect to both our scores if I'm added as AU to her existing mortgage??
We're working toward joint ownership of new home and trying to maximize scores.

[dragontears]

You can not be added as an AU on a mortgage (or any loan). To get your name on the mortgage you will have to refi into both your names

[Anonymous]

The mortgage will need to be refinanced in order for your name to get on it. Unfortunately it's not like a credit card where she can simply add you. 

[Anonymous]

Does your wife have a very old credit card?  If so, she could make you an AU on that.  In order for that to be a good move, it would need to be:

*  Much older than your oldest acount

*  Derog-free (no late payments ever)

*  Zero or very low balance

[RobertEG]

Adding an AU to your credit report to increase scoring should be done with caution.

Whenever you add the credit history of another to your credit report, that automatically means that the resulting scoring of that report is no longer a reflection of only your own personal risk evaluation.

Creditors are aware that, when seeing an AU account in your report, that the resulting score is based in part on account history that is not yours.  They cannot "back out" the effect of the AU on scoring, and thus it might affect how they consider the score.

It is not uncommon for mortgage lendors, upon doing a manual review and seeing presence of any AUs, to request the consumer remove those AUs so that the lendor can then see a "real" score that is based on on the named consumer's history.

I would consult with your intended mortgage lendor before adding any credit cards to each other's reports by way of AU status.

It may, regardless of raw score impact, create concerns during an underwriting process.

[expatCanuck]

One additional thought -- your scores strike me as already being high enough that, from a mortgage perspective, you're not going to benefit from improving them -- so why risk untoward consequences with the AU maneuver?

In our case, SWMBO has scores in high 700's.  This past summer, for our refi, I rehab'd my scores from the 660's to the 71x-73x range.  The mortgage broker told me that a median score of 710 (or possibly 720) was adequate; getting them higher wouldn't improve the rate.

As (the Legendary) RobertEG advises, consult your broker.

[Anonymous]

You may get better advice if you describe your situation and goals in more detail.  You mention that your wife has owned your home for many years, but that you wish to have a joint mortgage on your new home.  You also mention that you are newly married.

So is the following an accurate summary?

*  You recently married.

*  You both currently live in the home that your wife owns and on which she has had a mortgage in her name for many years.

*  You would like to buy a new home together in the future, and you wish to prepare for that.

If so, when would you ideally like to buy this home?

Also, how many credit cards do you currently have in your name only?  Are you an AU on any cards of your wife's?  What is the balance currently owed and the credit limit on each card (as it appears on your report)?  We can often suggest a way to get quite a few extra points by just tweaking your CC balances.

Do you have any derogs on your reports?  Lates, chargeoffs, collections, etc?

What is the age of your oldest account (in your name only)?

After you get your reports looking as good as possible, you will want to pull your mortgage scores.  You can buy them here at myFICO for $30.  I would spend time working on my reports first, however.

[Anonymous]

PS.  I am personally a bit skeptical of the need to worry of what a mortgage lender will think if he sees that you are an AU on your wife's card.  If that posed a serious problem, most mortgages to married couples would never get approved, since being an AU on a spouse's card is really common.

What might be a more realistic worry is if you were an AU on someone else's card -- a stranger, an old college friend, or even your mom or dad.  That might raise a concern, since the other party isn't buying the house with you and you aren't married to them.

Remember too that there are lots of lenders out there -- if one objects to you being an AU on your wife's card, there are others who would be glad to get your business.

Finally you can always just ask to be removed later -- so it's not like being added was some unfixable mistake.

All that said, I am not myself a fan of using AU cards as a person's first line of attack.  First consider whether there are simple things you can do (e.g. fixing your CC balances, getting lates deleted, etc.).  If you answer the questions I raised earlier we can advise you better.

[Anonymous]

Thanks for your replies.

Married just under 2 yrs.

Yes, both live in her pre-existing home which she's owned 25 yrs.  Most recent refi 7 yrs ago.

Yes, we want to build a new home of our own together; but intend to hold existing home as rental.

We have no CC debt. 

Currently have her mortgage, 2 car loans, and a land/lot note.