Hi , I have a dilema that I am hoping someone can help me with. In the effort to secure some good credit for my husband in the last year, I opened two CC accounts in my name and made him an AU so it shows up on his credit report. Both cards (mastercard) are about one year old. Because of some unintended expenses, we have about 80 percent utilization on one card and about 45 percent on the other within the last year. We want to buy a home in a at some point and since i do not have a job , the loan will be based solely on my husbands income and credit rating. Would it be wise to discontinue making my hubby and AU on one or both cards? Would it change his personal credit report for the better or not? Would it cause his score to go down or up. Will my personal debt make a difference when applying for a loan? Thanks DMR
First off I'd advise you NOT to get the mortgage in solely HIS name...you stated that the mortgage would rely on just his credit and income. If for some reason you separate and divorce he'll get the house and that would totally suck. As for removing him as the AU on your credit card my understanding is that can be done and it won't show on his credit report. I don't know how it will be reported? Maybe reported as closed account. As for closing accounts that can hurt your score. It will make your available credit to limits higher and thus lower his score. The best thing I would say is to work on paying those cards down as much as possible. Some mortgage lenders will look at the whole picture. When we bought our home in 96 they also looked at all our available credit. Alot of available credit was not a good thing. If you purchase the home using just his income and credit report then they won't pull yours. They will base the approval on his credit picture. I think the best thing for you to do is to pull your credit reports and see what needs to be done to make them better. Definitely paying off the card that is 80% utilized would be a good thing. If you only utilize his credit then the home will only be in his name. Therefore they won't care what your credit says as you're not liable for the mortgage. But be sure you want to apply in just his name!
Thanks for writing back. I just assumed that if I was not contributing to the mortgage, then I would not have an option to have the mortgage in my name. Otherwise, I would add my name for sure. Is that wrong? Also, my credit score is quite a bit higher than his even with the debt but is there a way to combine our reports so that the avergage of the score will go up even if Iam not paying one cent toward the mortgage. Thanks
I would then use both your credit reports and get the house jointly. I'd hate for something to happen and you don't have half ownership in the home. I understand you're not helping out financially to the payment but think of all the way you can instead. You'll be cleaning the house, working in the yard, etc...upkeep that you won't be paid for monetarilly. Just cause you don't contribute money wise you're still contributing other ways too! I would talk to lenders in your area and see where you stand. Go see about getting prequalified if you're serious. Ask them what they think about it all. Check with a few different ones. I wish you the best of luck and keep your chin up!
I do believe that if you live in a community property state, it doesnt matter if you put the house in just your name or both your names...in court it is still considered to belong to both of you..just fyi.
Re: Re: canceling cards and score I live in PA , so I do not think it is a community property state. I understand the non-finacial contribution I would be making on the home, but I was unsure whether lenders would bother pulling my CR if I was not contribting finacially. There is a ray of hope if lenders do consider that, but it may take some serious research to find one. thanks
