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How do I improve my fiance's bad credit?

Eva Norlyk Smith Ph.D.

January 13, 2014

QHi Eva,

I'm getting married in six months, and my fiance has bad credit. I'm not too worried about him being irresponsible and getting in a ton of debt. He's just never had a credit card, and he has had a few small bills that went into collections (which he ignored for a while). Those bills have been paid now. He got rejected for a card from his bank when he applied several months ago, and he even got rejected for a secured card with Capital One. So I'm thinking about adding him to my card because my credit is good. Does that mean his credit will impact mine and lower it? Or will mine raise his? Or will our ratings average out? He's willing to shred whatever card the bank sends him and just ride along on my credit for a while. Do you think this is a smart plan? Thanks! — Alana

AHi Alana,

There is a simple answer to your questions and a more complex one. The simple answer first: Yes, adding your fiance to your credit card can help him improve his credit and, no, it won't affect your credit rating to add him to the account, as long as you continue to pay the card on time and keep balances low.Ask Eva

While adding your fiance to your credit card may seem like a simple way to put a happy ending to his credit issues, reality is typically more complex. When adding someone to a credit card, there are numerous pitfalls you have to be aware of, which could lead to problems down the road.

Before we get to that, however, I'd recommend that you first spend a little time looking into why your fiance got rejected for that Capital One secured card. Sometimes, credit card applications are rejected on a technicality — if the card issuer is unable to verify the identity of an applicant, for example. If that's the case, your fiance may be able to get approved for the card simply by following up. It may also be the case that he has no income, which can also make issuers wary.

If neither of those circumstances applies, consider finding out more about those “few small bills that went into collections.” I'm not implying that your fiance is lying about his past credit mistakes, but the matter may be more serious than what he's told you. You're marrying him — and considering adding him to your own credit card. You have the right to know all the details, and he should be willing to talk about them. One suggestion I like to make for the soon-to-be-betrothed: Pull and view each other's credit reports together. It's not hard to do — you can pull them for free once a year from each of the big three credit bureaus at AnnualCreditReport.com — and can help build a sense of trust and partnership for couples.

Still set on sharing a card? There are two ways to do that.

Adding him as an authorized user

Because you mention you're thinking of adding your fiance to an existing card of yours, this is probably what you're getting at. When you add someone as an authorized user, they get issued a credit card in their name to draw on the account, but you remain fully responsible for all charges. Should the authorized user make purchases and fail to pay them off, you will be on the hook for the debt. If you refuse to pay the debt, it will hurt your credit score as much as if you'd made the charges yourself.

It sounds like you two have agreed that he will not be using the card, so that would save you the headache of being responsible for his charges. Just be aware that, with a card in hand, he could run up debt that he has no responsibility to pay.

There are a couple of advantages in adding someone as an authorized user. You have full authority to remove your fiance from the card at any time, and your fiance gets to build his credit — just make sure that your card issuer reports authorized user arrangements to the credit bureaus (most do).

Opening a joint account

This would involve opening a credit card account that you and your fiance co-own. Instead of you having full responsibility, you'd both share responsibility for paying the balance. If you were to run up a debt, your fiance would also be on the hook for those charges (and any possible credit damage) and vice versa.

On the plus side, being a joint user will help your fiance build his credit. On the minus side, once you open the account, you can't remove one person from it without closing the entire account.

The bottom line? Do your due diligence and find out why his application for the secured card was denied, and if there is any way for your fiance to qualify. Calling the card issue together may give you some valuable insight into what caused the decision. If that doesn't work, and if you don't come across red flags while exploring the secured card option further, your best option is to add your fiance as an authorized user to the card you already have. But stay on top of the charges and make sure you both continue to agree on how the card is used. If you see something you don't like, don't just sweep it under the rug to avoid conflict, but find a way to address it before it becomes an issue.

Good luck and congratulations!

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