Adding A Spouse To A Credit Card To Build Credit
Building credit is essential for creating a financial life in the U.S. You need a healthy credit score to rent an apartment, buy a vehicle, buy a home, borrow money for educational expenses, or start a business. Credit cards are a great way to build credit, but there is a catch. Getting approved for a credit card can be challenging when you have little or no credit history.
But there is a way around that, adding a spouse to a credit card! We’ll explain thin credit files, adding a spouse to a credit card to build credit, and other ways to build credit.
Thin credit files
Your credit history or credit file comprises information about your consumer accounts. The data is collected by the three main credit bureaus: Experian, Equifax, and TransUnion. The information is calculated into a number generally between 300-850; the higher, the better, but in most cases, anything over 760 is considered Excellent.
Potential lenders buy this information to help determine whether an applicant is a reasonable risk; if they loan them money, how likely are they to pay it back and on time?
Your credit report contains:
Number of credit accounts
Types of accounts (revolving or installment)
Account balances
Payment history
Negative remarks (late and missed payments, bankruptcies, judgments, and liens)
Those new to the U.S, young people, and people who have predominantly used cash throughout their lives don’t have much or any credit history, what is termed a “thin” credit file. There isn’t enough information to compile into a credit history and score.
This thin credit file can make it difficult to do the very things that would help build credit, including getting a credit card!
Adding someone to a credit card
You can add a husband to a credit card, a wife, a child, and really anyone you choose. You can even add a minor child. Some credit cards have a minimum age requirement, and others don’t.
The person added to your credit card is called an authorized user. Some cards limit the number of authorized users you can add, while others allow unlimited authorized users. And some cards charge a fee for adding an authorized user, while others do not.
You can add an authorized user over the phone or by logging into your online credit card account. You’ll need the authorized user’s personal details, including their name, address, date of birth, and Social Security number or ITIN.
Not all credit cards report an authorized user’s information to the credit bureaus, so choose a card that does before adding a user, otherwise, it won’t help them build credit.
The authorized user will have their own credit card with their name on it. They have the same ability to use that card as the primary account holder, including the same credit limit. But the primary account holder is responsible for paying all of the charges on the card each month, their own and the authorized user’s.
If the credit card reports to one or more of the credit bureaus, the information will show up under the authorized user’s name within 30-45 days of being added to the account. It takes three to six months of regular activity for your credit file to be thick enough to create a credit score.
After that time, the authorized user may want to apply for a credit card on their own to continue building credit. The primary account holder may then wish to remove the authorized user.
Keep in mind that for this to work ideally, the primary account holder needs to have a healthy credit score of their own.
Build credit with Upwardli
Upwardli is another great way to build credit. Upwardli was created to help those newly arrived in the U.S. build credit and match them with financial service providers who understand their unique challenges. Upwardli is here to help you create your new financial life!
