Best approach to rebuild partners credit?

Legacy_user

Hi,


Fairly long time lurker making first post here, please be gentle! Apologies upfront if this isn't the right location to ask this question, it looks the most sensible place to me, please advise if I am wrong.


My partner and I have not always been terribly money savvy, we have had lots of debt for quite a long time, and I thought we always kept on top of it - it wasn't until I started reading Martins MSE posts that I realised we had issues.


Since November 2016 when I got serious about this, I have paid off all of my partners debts, and consolidated 50% of mine onto a 2 year interest free card at no charge (DD setup to pay if off in the 2 years) and the other 50% remains on a card that I am maximising my payments on as much as possible.


So now, my credit score is reasonably good in the high 80's, albeit I have relatively high utilisation - but over the next 2 years it will shrink - I have also just started a part time weekend job to speed it up with all of that money going onto the card with interest (my main job obviously pays the normal bills as well as debt)


What was a bit of a shocker was finding out my partners approach was even laxer than mine - while she had less debt, she paid manually, and was often late, or slightly underpaid. While I have paid all of her debt off, her score is in the low 400's which will impact us when we apply for a mortgage in 2 years.


Her cards are closed now, and I hope I have provided her with the same education I got from Martin and this forum, but I'd like to start rebuilding her score, while I know its not the be all and end all, it is an indicator and it would be better if a positive one.


Ideally I don't want to get more debt to do this, but if I add her to my card, i.e. the interest free card that will be dropping debt rapidly, with DD payment setup on time each month, would that help improve her score - or does it have no impact at all?


Apologies for the essay, I thought it helps to be clear of the causes, and what we are trying to do!


Thanks in advance,

South.

Ebe_Scrooge

southbynorth wrote: »

So now, my credit score is reasonably good in the high 80's - Your score is meaningless, ignore it.

her score is in the low 400's which will impact us when we apply for a mortgage in 2 years. No it won't, lenders can't see your score.



Ideally I don't want to get more debt to do this, but if I add her to my card, i.e. the interest free card that will be dropping debt rapidly, with DD payment setup on time each month, would that help improve her score - or does it have no impact at all? It won't affect her fictitious score, the cards are in your name.





Thanks in advance,

South.

My thoughts in bold above.


Ignore the score, it's irrelevant and lenders won't see it. What will impact her credit-worthiness is a history of late payments.


The simplest way to start rebuilding a decent history is to get a credit card in her name. Use it for everyday purchases ( food, petrol, etc. ), and pay it off every month, in full, on time, without fail. A DD set up for the full amount will ensure you never forget.


You may need to be looking at the sub-prime cards initially, but don't be scared by the high APRs - you won't pay interest as you'll be paying in full every month.


After about a year of so of sensible, regular use, her credit file will have improved somewhat.


Aside from that, make sure she's registered on the electoral roll.

System

Thank you - you have highlighted what we are really trying to do - rebuild the "trust worthiness" as a member of the clueless I'm still educating myself on that.


We are both on the electoral roll - thank you for the tip through.


So no quick wins, but a slow steady slog. I'll look at her affordability score with her tonight and see if there is one she can apply for with a DD for the full amount. She already has a mobile setup with a DD so hopefully that will help in some minor capacity as well.


I'll just have to keep on the education path to make sure the pair of us (want to be clear I'm not throwing all the blame at her feet!) don't repeat history.

Thrugelmir

Stay off credit. Learn to use cash. As you wouldn't expect someone that has been to AA. To learn to control their habit by frequenting bars again. People are people.

System

Thrugelmir wrote: »

Stay off credit. Learn to use cash. As you wouldn't expect someone that has been to AA. To learn to control their habit by frequenting bars again. People are people.

Thank you for your advice, but I have to be honest, I dont overly proscribe to this - yes its difficult to change, but it wasnt that long ago I was in a similar state to my partner, and I have done a full 360 for quite a while - the challenge here I guess, is that the person has to want to change, rather than be forced to do it by me.


I'm encouraging self education, reading of sites like MSE etc, I dont want to be in a position where I cant trust my partner to be sensible for the rest of our lives!

PixelPound

Thrugelmir wrote: »

Stay off credit. Learn to use cash. As you wouldn't expect someone that has been to AA. To learn to control their habit by frequenting bars again. People are people.

Kids in france are given watered down wine so that they can get used to drinking wine; in the UK kids aren't introduced to alcohol and then when they are old enough go out and get rat !!!!!d all the time.
By your reckoning, should she never get a mortgage then?

To OP. She would need a card in her name, rather than be a second card holder. The getting one and using it for shopping and paying off in full, is sound, however it depends how she is with money in general - if she always spends the money in her a/c then the philosophy of using a card and paying off in full at the end might not work.

Thrugelmir

nic_c wrote: »

Kids in france are given watered down wine so that they can get used to drinking wine; in the UK kids aren't introduced to alcohol and then when they are old enough go out and get rat !!!!!d all the time.
By your reckoning, should she never get a mortgage then?

Statistically people that default on debt will do so again in their lifetimes. Down to the nature they were born with. Those that turn it around dig their way out of their own hole. Credit card management proves nothing. Only provides an ability to borrow when things get tight. Better to learn to save, before spending.

A mortgage is not unsecured credit. Lenders consider the likelihood of a borrower meeting 300 odd repayments on time when making their decision. Credit profiling is pretty accurate.

smem18

I wanted to say well done for being pro-active and starting to fix your situation. It sounds like you have done all of the right things and are on your way to becoming debt free in a couple of years. It sounds like a long time but it will fly by!

Like others have said, really the only way to rebuild your partners score would be for her to have a credit card in her name that is paid off by direct debit every month. She'll obviously have to be sensible with it but if she can manage it, the best thing to do is pay for all purchases using this card. She must never ever be late repaying it and always repay it in full!

Its not so much about the score, but rather that in doing this, she will show the lender that she is capable of managing money and managing credit. Stay out of overdrafts too if you can.

Geoff1963

How about your partner gets a credit card ; but you carry it around, and give it to her to make agreed purchases in shops, bars, etc. ? Might be best to scrape off the security code, so she doesn't use it online.

Credit is trustworthiness, which means resisting temptation, which means having temptation.
You must know the story of the woman who puts out a dating advert, and very quickly gets a phone call from a man. He explains that he doesn't take drugs, or drink, or go out to bars, or associate with "ladies of easy virtue". She tells him that he is leading a very virtuous life, and thinks they could well be suited to each other. The man humbly agrees, then says, "I just hope I can keep it up, when I get out of prison".

System

Thanks everyone, lots of ideas to think about, I especially appreciated the encouragement:)

Going to sit down and chat about this to my partner, I think a combination of some encouragement on education, a saving plan and potentially a limited card that we both monitor may work, my thoughts are habits can be trained both positively and negatively, if I can find a motivation that works for her that will get the ball rolling.

Crystal_Pixie

Thrugelmir wrote: »

Statistically people that default on debt will do so again in their lifetimes. Down to the nature they were born with. Those that turn it around dig their way out of their own hole. Credit card management proves nothing. Only provides an ability to borrow when things get tight. Better to learn to save, before spending.

A mortgage is not unsecured credit. Lenders consider the likelihood of a borrower meeting 300 odd repayments on time when making their decision. Credit profiling is pretty accurate.

I'm sorry but I really do take umbrage to this statement. A lot of people like myself are put in the situation due to a radical change in their circumstances.


I would never, ever get myself into debt again - even to the point I have 12 months of salary saved and I use no credit.


If you have ever gone through the painful experience of being in debt you would never put yourself through it again.