In 2003, we refinanced our home. My credit was worse than my wife's, so her name is the only one used when we closed. First, please let me know if this assumption is correct: If I try to get my name on the mortgage and the loan company starts reporting on-time payments, will it help increase my FICO? The problem: I called the mortgage company and they said that my wife could add me as an authorized person, but any payment info would not be sent to my file at the credit reporting companies. She also stated that anyone's name could be added to the title or deed, but the loan still wouldn't be reported on my CRC file. She stated that the only way to achieve this is to refinance or if the loan was assumable. i.e. The process of closing is what counts. Is her information correct? Who's actually responsible for deciding who's credit file something gets reported to? Is this more trouble than it's worth? I thought this would be an easy thing to do - add my name, since we're married, I make the family income, and I write the checks! Thanks for your help, Sledge
thats odd..as an auth user on the acct, it does get reported to the CB monthly for both names and it should help your credit if they are paid promtly.
Yes, the information is correct, it is actually the "filing" of the mortgage that dictates whose name it is in, and hence reporting. To be reported on your credit reports, the mortgage would have to be in your name also. You cannot be added as an "Authorized User", so to speak, on a mortgage. To be added, you are basically refinancing, and creating a new mortgage. Is it worth it? In the long run, perhaps. But, right now it would be very costly due to refinancing. What you may consider is opening a "Home Equity Line Of Credit in BOTH your names. This would report on both your credit reports, and you do not have to touch the first mortgage. Sorry, but mortgages are not like credit cards, and a "name" cannot simply be added.
Thanks BizWiz41. That's a bit of a downer, since the person making all the good faith payments isn't even getting the benefit. I guess my wife should thank me - LOL! I suppose I should at least get my wife to fill out the paperwork, so I can be authorized on the account. When I called the mortgage co., they didn't even want to talk to me - I said, "That's what I want to talk to you about!" Thanks, Sledge
I'm guessing here but when I read your first post you used the term 'authorized person'. Your most recent post solidifies my thoughts here. As an authorized person on the account, the creditor would be allowed to discuss the debt with you. The 'authorization' would be from your spouse (the debtor). Similar to how elderly people can indicate third party notification on utility accounts. The idea is the gas company can call sonny or daughter to let them know senile old mom forgot to pay her bill and they are going to shut off the gas. In this case, the mortgage holder would be able to contact you and inform you of any discrepancies with the account, such as late payments, pending forclosure, ect. You would not be legally responsible for the debt, just someone the creditor could contact to discuss it. You would not have the right to change the terms of the original agreement, add to, nor have legal responsibility for the debt.
I guess my only question here is, what are the terms (interest rate, type of mortgage, terms, etc.) on this current mortgage? The reason I ask is because if you relied upon your wife's scores to get the mortgage, was it a "good rate"? It may be in your best "long-term" credit reporting interest to refinance the mortgage in both your names at some point. If you plan on staying in the home for an extended period, then it may be worthwhile to start planning for a refi of the mortgage. You may have to wait a while, to ensure your Loan To Value ratio is solid, and your credit scores are sufficient, but it may be worth the refi expenses in the long run. Something to think about.......
The current mortgage is a conventional 6.5% for 30 years, so it doesn't make sense to refinance at todays rates. We have $60,000+ equity on a $180,000+ home, so we could possibly get a Home Equity loan sometime. Of course, you never know when you may have to move. It just seems to me that the industry relys so heavily on the FICO score, but I can think of a few instances that the FICO score isn't very representative of a person's ability to repay a loan or manage debt. Thanks, Sledge
I recommend a Home Equity Line Of Credit, NOT a home equity loan. The HELOC will report on both your credit reports, but do NOT use it. If you sell or refinance a $0 balance HELOC will just go away, and be closed. It will cost you a small amount for processing and annual maintenance fees, but you do pick up a "mortgage" type account towards your FICO score. Also, a HELOC is a great emergency financial tool. It is best to secure it when "you don't need it", and have it there for an emergency such as job loss, house repair emergency, etc.
