Should I Add My Spouse to My Credit Card Accounts?
Adding your spouse as an authorized user to your credit card won't hurt your credit score, but it could help your spouse's.
December 2007
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Q: I have a credit score of more than 800. My new wife has a much lower score. I'd like to add her as a co-borrower on some of my credit cards. Would that negatively affect my credit?
Don't worry. Your credit score reflects only your credit history, so your score will not include your wife's accounts. But her score will go up when she becomes a joint owner because her credit report will include your accounts' history.
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To convert your individual accounts to joint accounts, you will have to fill out an application for each account you want to modify. The card issuer will scrutinize your wife's credit report (and perhaps yours), and you may be offered a higher interest rate or a lower credit limit depending on your combined histories.
Previously, adding a spouse or a child as an authorized user to your account was a quick way to raise that person's credit score. Such "piggybacking" on someone else's credit will not be possible when a new version of the FICO score is implemented next year. (Read: No More Borrowing Credit History)
Fair Isaac, the company that created the FICO score, does not recognize authorized users in its new FICO formula. It's still possible to add an authorized user before the three major credit bureaus -- Equifax, Experian and TransUnion -- adopt the new formula. Craig Watts, a spokesman for Fair Isaac, says scores calculated using the formula will not be available from all three until the summer and not all lenders will adopt them immediately.
Watts predicts that the long-term impact of the new scoring system will be a slight rise in credit scores.
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Reader Comments (3)
Posted by: Kathy M at 12/18/2007 09:00:20 AM
Is adding an authorized user different than converting an individual account to a joint account? I have excellent credit but my fiance's is less than stellar so I recently got him cards as an authorized user on two of my accounts. Will this boost his score or do I need to fill out some other application? Thanks.
Posted by: Joan Goldwasser at 12/18/2007 01:50:40 PM
As the author of the article, I am happy to clarify. Adding an authorized user is different because the authorized user is not financially responsible for the charges. when you have a joint account, both parties are equally liable. Until the credit bureaus switch to the new FICO score, authorized users' reports will include all accounts. That means your good credit history will be included and his score should go up. However, that is likely to end some time this summer. Then your fiance will have to be a joint owner of your cards to get the benefit of your credit history.
Posted by: Steve P. at 12/19/2007 02:31:12 PM
Adding a new spouse is a rarity compared to the 120 million accts...of which 67% are spouses. In CA a joint property state the FICO score loss will be approx 50 pts for each card. So having 4 cards is a loss of 200 pts where each is legally liable for the debt but won't get credit for the history if listed as an assoc. and the lender won't allow joint accounts. Thus the many will suffer for the few.