Credit Tips: Do Husband and Wives Credit Rating Affect Each Others?

Posted On: January 1, 2006

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Posted: Wed Sep 29, 2004 1:36 pm
Post subject: Do Husband and Wives Credit Rating Affect Each Others?

Lynn
Date: 2/7/2001 11:32 pm CDT

How would you advise that my husband and I re-establish good credit — especially after defaulting on students loans, though these have now been bought out by Nellie Mae, so they’re back in normal status. Also, we have used Genus Credit Management, a nonprofit credit counseling service, to help us repay all of our credit cards — and should be completed with that program in six months. In the meantime, is there any thing we can do? Do spouses’ credit ratings affect either other’s? Thank you.

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Posted: Wed Sep 29, 2004 1:37 pm
Post subject: Do Husband and Wives Credit Rating Affect Each Others?

Eugene
Date: 2/8/2001 3:23 am CDT

When you start paying a loan as agreed again after defaulting, or when you have paid off your credit cards through a credit counselling organization, your credit does not immediately return to “normal” - the negative record stays on your report for seven years.

That said, you will not be considered highest risk for all those seven years. Good rating is built (or rebuilt) gradually with time.

A great risk for people just out of debt is plunging right back into it because of sense of (false) freedom, security and self-confidence. So, you want to make sure that in an attempt to rebuild credit you do not borrow what you cannot comfortably pay back.

I also do not think that it’s a good idea to borrow money if you do not need it and cannot make it work for you, just because you want to rebuild credit. Using a credit card with a small limit (possibly, secured at first) is a good and safe way of getting back on track. Pay it in full every month to avoid finance charges and enforcing bad credit habits.

Credit is considered individually, unless a couple applies for a loan together. If both your and you husband’s credits are bad, I would suggest rebuilding individually. Being an authorised user only on credit report does little good, if any, so each of you will have to be a main account holder on at least one account. You could still have the spouse as a co-holder.

No mater what credit accounts you open, make sure the creditor reports the status to credit bureaus regularly.

And before you start rebuilding credit (especially by borrowing more than you could easily pay back any time), build some savings.

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Posted: Wed Sep 29, 2004 1:37 pm
Post subject: Do Husband and Wives Credit Rating Affect Each Others?

Andrew
Date: 2/8/2001 4:39 am CDT

Greetings.

This is my first time posting to the message board, but I am not a stranger to it. I’ve been reading this and a few other credit-related message boards over the last several months.

As usual, I find myself disagreeing with Eugene’s often blatantly wrong information.

Paid credit accounts do not necessarily remain on your account for seven years. Depending upon the state you live in, accounts that you have defaulted on but have paid off must be removed from your credit reports after 5 years. Additionally, once you have completely paid off the accounts that you owe money on, it would be well worth your time to call the customer service number for each of the creditors and ask to speak to their credit department. Ask the credit department if they would consider removing the account from your credit record – explain any exonerating circumstances if they’ll give you the chance to be heard. While a good majority of credits do not want to hear it, some may be understanding and willing to – it really all depends upon the person you speak with. Don’t waste your time with the customer service folks, though. Make sure it’s the credit department.

As far as not being an advocate for “reestablishing good credit”, this also sounds extremely bizarre. I have no information related to this ladies life-style or living situation, but, let’s assume her and her husband want to move in a year or two — or rent a car — some car rental companies are now pulling credit reports in addition to driving records. Reestablishing a healthy financial/credit profile would defiantly be in their best interest.

As a first step to re-establishing credit, make sure you know where you stand. Get copies of your credit reports. There are three major credit reporting agencies in the U.S. (Trans Union, Equifax and Experian). If you have a moment, visit http://www.worthknowing.com. You can obtain a free copy of your Trans Union credit report from their website – immediately – online, within 30 seconds. No fees or strings attached. Check it over, and look for any errors. If there are any, write to them, immediately. Next, order a copy of your report from Equifax (either by phone – or, you can get instant access online at http://www.credit.equifax.com) and Experian (http://www.experian.com).

I would also strongly recommend applying for two credit cards. They are both relatively easy to get. Aria, at http://www.aria.com will take your application and within 30 seconds tell you if they’re able to approve you, and if so for what amount and with what terms. Also, http://www.fncc.com is a good choice. You might have to pay an annual fee, perhaps $60-100 a year since you are, in a lot of ways, starting over again. Don’t be discouraged by this. Look at it as an investment in your future. A secured credit card account may also be a good option. You can obtain more information at http://www.sterlingbank.com (Sterling Bank and Trust). They will give you a credit card with a limit that is 120% of whatever amount you deposit into a savings account with them, or 133% if the deposit is $5,000 or more (the minimum is $200).

.. and, on that note, I think I will end. This is already gotten quite abit longer than I had anticpated. J