Declared bankruptcy? You can still be an authorized user
Kim McGrigg is Community Manager for Money Management International, where she provides personal finance education information to consumers.
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Dear Credit Care,
If I declared bankruptcy last year, would I be able to be listed as an authorized user on my wife's credit card account? She has perfect credit. -- Adam
Yes, your wife can add you as an authorized user on her credit card
account. She can simply call the card issuer and request to add you as
an authorized user on the account. A card will be issued in your name
that is tied to your wife's account. I would recommend that you and your
wife discuss before the card arrives how -- or if -- you will be using
the card, so you are both on the same page.
Once you are added to the account, the account history will appear on
your credit report. Since your wife has perfect credit, the account
should be in good standing, meaning she pays on time and as agreed each
month and doesn't exceed more than 30 percent of her credit limit if she
carries a balance.
The positive information on your credit report from your wife's credit card account will help to boost your credit score, but that action alone
will not work miracles for your credit history. You will need
additional positive information reported to the credit bureaus each
month to get you back on the road to good credit.
You might also consider applying for a passbook savings loan with your
bank or credit union. These loans are secured by your own deposit with
the bank and you repay the loan in monthly installments at a reasonable
interest rate. Since the goal is to improve your credit, be sure that
your lender reports the loan to the three major credit bureaus -- Experian, TransUnion and Equifax. If the
account is not reported, it will not help you improve your credit.
A secured credit card might also be something for you to consider. These
cards -- as the name suggests -- are also secured by your money that is
on deposit and can be used just as any other credit card. Your credit
limit will be based on the amount of your deposit.
With your wife's account and two accounts of your own, you will be well
on your way to rebuilding a positive credit history to balance out the
huge negative of your recent bankruptcy. Of course, you must make
on-time payments as agreed on the accounts and give it some time. You
should see significant improvement in your score in two years or more.
Remember that you cannot be discharged from another Chapter 7 bankruptcy
for eight years following a previous Chapter 7 or six years after a previous
Chapter 13. You cannot be discharged from a Chapter 13 bankruptcy for four years
following a Chapter 7 or two years after a previous Chapter 13.
Handle your credit with care!
See related: What to expect when you're made an authorized user, How to boost your credit score from good to great, You're eligible for Chapter 7 bankruptcy, but should you file?
Kim McGrigg is the community manager for Money Management International, the largest nonprofit, full-service credit counseling agency in the United States. You can find more money management advice on Blogging for Change and MMI's Facebook page.
Credit Care answers a question about a debt or credit issue from a CreditCards.com reader each week.
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Published: July 4, 2011