Me and my husband are in the process of trying to buy our first house….the one we now(rent) live in. He just recently obtained some credit, but only reported to equifax. Inorder for him to get the loan he will need to get a credit card, which would be a secured card. No problem. The loan officer said if he could be added to someones card, that would be fine. I could add him to my best buy card, since they do report to all 3 bearues, but the only thing i’m wondering if would it hurt him even more since my card is almost maxed out. I thought about rather then paying 200.00 on another card, to just pay it on mine. But if i do, Should i add my husband before i pay to get it down to under half, or should i wait to add him after i have paid it? I knew that if you ever go over half on a credit card, that it doesn’t help, but i didn’t know that it drops your score. Would it be best if he just got his own card?
I had my card paid down to 200.00, from a 500.00 limit, and the score went up fairly quick within a few months. I was told by a credit company, that as long as you keep it under half the amout, your ok. However, i do know that putting small amounts on it every month, then paying it off would def. help. I’m just wondering, should i do that before i add my husband or after? Or should he just get his very own card?
Adding your husband as an authorized user won’t do anything to help his credit rating, but can hurt it if you default or make late payments as only negatives are reported to the credit bureau. If you add him as a co-owner, that can potentially help, but since your credit utilization ratio is over 30% on that account, that probably wouldn’t be the best idea. A secured card in his own name is most likely the best way to go.
You have to be careful who you listen to on this site. People who bleat like sheep about paying off balances every month increasing FICOs are full of it. Paying off in full will not do a thing to increase a credit score. The only thing reported is the timeliness of your payments. However, if your credit utilization is above 30% on any account, it may make a lender more reluctant to extend credit.
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Really, you need to keep credit utilization at 30% or lower for optimum results, so on a card with a $500 limit, you should not be carrying any more than $150 in revolving debt per month. If you want to add your husband as a co-owner (as opposed to authorized signer), wait until you have done so. Many credit card companies will not report to the bureau on authorized signers unless it’s something negative and they are under no legal obligation to do so (that’s another way these creditors get you…they’ll report on the negatives but say nothing about the positives). Making him a co-owner means they have to report on him as well. However, the card issuer may decide that your husband isn’t worth the credit risk and deny your request. If that happens, your only other option is for him to obtain a secured card in his name.
By adding him to your card it may be recorded on his report as "new credit".
New credit lowers the scores for the first 6 months.
For top ratings, use that card for food or gas, but pay it in full each month.
If your card is maxed out – it is destroying your credit.
This maxed out info will then report to his credit also.
Any time you pass over 25% of your available credit line – you start reducing your score.
Stop carrying balances on your cards if you want a house someday.
Pay off the cards, then go to Equifax.com and pay 8 bucks for your score.
You’ll be pleasantly surprised.
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