To Joint Account or Not To Joint Account That Is The Question...

The_Grateful_Ghoul

After years of dreaming of becoming debt free and having learned from my mistakes, I am finally in a good place.

In the next few months, I will have paid off all of both mine and my wife's existing debts and have a healthy deposit to put on a house but before we can consider this, we want to build up our credit rating.

So our current situation according to Noddle is as follows.

Me - Credit Rating 3/5 (no outstanding debt of any kind)

Wife - Credit Rating 1/5 (due to a couple of missed payments several months ago but now also completely debt free with nothing on her record.) Now I have just paid this off, will it disappear off the record straight away?

In my head, I was going to open a 123 account, put the house deposit in there for the top interest and also put all of our household bills in there too.

This way we both have a good healthy bank account and also a joint account with enough for a deposit and also all of our utility bills.

However after watching the Money Show on Friday, it appears joining our finances could be considered a bad thing and affect my rating.

So my question is as we are both now debt free, would the good outweigh the bad as we both begin to rebuild our credit rating ready for a mortgage application in around 6 months.

Huge thanks in advance to anyone who can help.

grumbler

Why does it have to be joint? How is it better than a single or two single?

The_Grateful_Ghoul

Good point.....

I guess in my head I thought it would make sense to have all bills in one place in both our names as it would show stability but also keep our independence with with our existing individual accounts with our own spending money.

dr_adidas01

So you basing your credit worthiness on your Noodle (CallCredit) report. I would check out your Equifax and Experian reports before you consider doing anything. These are the main two that most suppliers of credit use callcredit is the poor relations of the CRA world.

All debts stay on your credit report for 6 years before they drop off , so only just paying your wifes debt and missed payments isn't going to have any immediate positive effect.

The_Grateful_Ghoul

The Noodle (CallCredit) report was just my first port of call and I going to also run the other two after a month when it should show that the payments for all debts have been paid before we begin rebuilding our credit rating.

I know these things take time but just want to make sure we are taking the right positive steps for the future.

jakesuk

dr_adidas01 wrote: »

All debts stay on your credit report for 6 years before they drop off , so only just paying your wifes debt and missed payments isn't going to have any immediate positive effect.

Correct me if I'm wrong, but strictly speaking you are not correct.

Any late payments stay on your credit report for 6 years from the date the account is settled ie. the late payment marker can stay on your file for much longer than 6 years... depending on when you close the account.

After a few years though the impact of a late payment is not going to have a big impact on your report provided everything else is hunky dory.