Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006).
Dear To Her Credit,
My ex-husband put me on as an authorized user for two of his
credit cards. After discovering he has not been paying his balances, I checked
my credit report. The credit card companies are reporting me as late on my ex's
credit cards.
Can they legally do this, and do I have any recourse? I am not a joint account holder with him -- only
an authorized user. -- Paula
Dear Paula,
Yes, they can. But your recourse is simple.
Being an authorized user on a credit card sounds like a win-win
deal -- even with an ex-husband. You use the card, but he pays the bill. You
are not responsible for the balance. The card is reported on both of your
credit histories (although it may or may not affect your credit score,
depending on the model), so if the credit card has a long, good history, it may
help your credit score. What's the catch?
The catch is this: If the credit card has a not-so-great record,
it's still reported on your credit history. That's why you should think twice
about accepting an offer to be on someone else's credit card. You have no
control over how and when the card is used, yet you share the pain if it's not
used and paid responsibly.
For this reason, you should get off these cards. "She
needs to remove herself as an authorized user," says Andy Jolls, CEO of
VideoCreditScore.com. "If you can get credit on your own, you should not
be an authorized user any longer. In her case, she needs to call the credit
card companies and have herself removed as an authorized user."
If your ex put you on the cards as a way of paying support
to you, there has are better ways to do that. A good old-fashioned check, or
one sent by online banking, leaves a much better record. (As a side benefit, he
doesn't need to know exactly what you're spending money on that way. Which is
arguably none of his business!)
The next thing you need to do is start getting your own
cards, if you don't have them already. You might have better luck getting them after
your ex's delinquent cards are off your record. It's fairly easy to get started
with a store or gasoline card, and then try for a major credit card after a few
months. You could even get a secured credit card to start -- that's a card that
requires you to have money in an attached account to equal your credit limit. Secured
cards are a great way to prove your creditworthiness at no risk to the bank.
You're in complete control now, so now's your chance to keep
your credit record flawless. Think of your cards as payment tools, not loans,
and pay each balance as soon as you receive the bill.
Don't try to improve your credit by getting lots and lots of
cards. It won't help. There's no reason to keep a balance or buy anything you
wouldn't otherwise. The best way to build your credit is slowly and steadily,
by being one of those boring credit customers who is never late on a payment
and never, ever goes over the credit limit.
Remember, your credit score affects not just whether or not
you get the next mortgage or credit line you apply for. Your credit score can
affect your interest rates and even whether you get a job. You may not ever
know that your credit score was the deciding factor in something that affected
you profoundly. That's why it's so important that you take action to protect
your score -- today.
Sally Herigstad answers questions about credit every week for CreditCards.com. Herigstad is a certified public accountant, author and speaker. She also writes regularly for MSN Money, Interest.com, Bankrate.com and RedPlum.com, and has been a guest on Martha Stewart radio and other programs. You can read more about personal finance and download free budgeting worksheets at her website: www.sallyherigstad.com
To Her Credit answers a question about a debt or credit issue from a CreditCards.com reader each week.
Send your question to Sally.
Published: July 24, 2009
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