Consumer Comeback Blog

Removing errors & improving credit history with joint accounts – Questions from readers

I found out that my CREDIT SCORE did NOT GET RESTORED, once the wrongly reported “DELINQUENT ACCOUNTS” were deleted from my Account and the ACCOUNT IN GOOD STANDING WAS POSTED. How do we make them restore the Credit Score to what it was before the Collection Agency wrongly reported the accounts?

This is a very good question, and a difficult one to give a definitive answer to. With all the factors that a credit score takes into account, it’s almost impossible to predict how much your score will be affected by a single negative mark. Additionally, there are a number of potential reasons your credit score may not have returned yet. So, I’ll try to cover some of the more common ones:

Understanding Credit History as a factor for Credit Scores - First of all, credit history – particularly payment history is just one factor taken into account for your credit score and your entire history is taken into account. A single delinquency may not be the large of a source of credit score deduction that you might think. If, for example, you have a rich history of making payments on time, a single blemish might not mean too much, especially if it’s a relatively old one.  On the flip side, no credit history is the same as having a bad credit history…so if what was removed was all (or most) of your history, there isn’t much improvement to be had.

Also, just because the account is now “in good standing” doesn’t mean you don’t have a history of late payments – or that it wasn’t delinquent at one point. If you have such blemishes on this account (or others), they will still remain on your credit history, hurting your overall score. The more recent they are, the more they hurt; the larger the amount owed, the more it hurts. And if this is the case, the only thing you can do now is continue to make on-time payments and start rebuilding a positive credit history.

Recent credit requests – When you make a request for credit, like signing up for a credit card, your credit score may drop temporarily. “New credit” makes up roughly 10% of your score and this temporary drop lasts around 90 days (depending on the reporting agency).

It’s no coincidence that most people who are compelled look up their credit history (and attempt to fix it) do so shortly after they’ve been rejected due to a low credit score.  And if the score was low at the time of being rejected, it’s about to get lower.  If you’ve applied for credit within the last 90 days, wait a couple months before you do so again and your score will likely improve.  It could be this temporary drop that’s offsetting any increases you’ve had to your credit score

Disputing & removing erroneous delinquencies – Disputing erroneous negative claims on your credit report can be a terribly frustrating process to go through, but you must be diligent. When you dispute information on your credit report, the institution (bank, etc,) that reported it has 30 days to respond or correct the information or it will be removed automatically (by law). Also, if the information turns out to (in fact) be in error, they are required by law to correct it on ALL THREE reporting agencies. These laws are intended to help people like yourself get a fair reporting of credit information. But that doesn’t mean companies won’t drag their feet and/or use legal protections of their own.

For example, if the institution in question didn’t respond within 30 days, the delinquent status can still return to your credit report – if they decide to later fight your dispute. If this happens, you should get notification that the information is back. Also, there’s little governing the time-line for institutions reporting to the other reporting agencies, so make sure to continue to follow through with all agencies that it has been removed.

Be patient – The exact inner workings of the calculation of credit scores is somewhat of a mystery. It may be that your score will jump back today, or it may take a few weeks…it could be months. Being a credit score hawk – monitoring your score regularly – might be more frustrating than helpful. Once you’ve had a delinquent account removed, there simply is nothing more you can do beyond building a positive credit history by paying your bills on time.

 

I recently got married. My husband is originally from Canada and when he moved to US he never had a credit score done. He never even had a credit card in his life. We could not put his name on our new car loan because he had no credit history and as loan manager explained to us that can increase the interest rate on the loan. I added my husband to my credit card so he can build his credit history (he could not get approved for Wal-Mart credit card by himself). So few months after, my husband blames me for his score low because I do have lots of debt. It is true I do have mortgage, home equity loan, credit card debt, school loans, and now car payment. But I have been paying at least min payments on time every month. I told my husband his credit score is low because in order it to go up he needs to build a history and sometimes it takes years. Most of my debt is on my name only; it should not affect his score. Right? Please let me know why he might have low score and how to increase it fast.  Thank you in advance, Alex.

You are correct… for the most part. When you co-sign credit or loan accounts, it will go on both of your credit reports. But each of you can also have individual accounts will only appear on the reports for those who’s name it’s under. So for example: the mortgage, home equity loan, student loans, and car loan are yours and yours alone and cannot hurt his credit score at all.

With that said: While your own (non-joint) accounts can’t hurt your husband’s credit score, carrying too high of a balance on the joint credit card can be hurting you both. And if you’re currently only making monthly minimum payments to the card, it sounds like this might actually be the case. It’s recommended to try and keep your balance under 25% of the available credit (under 10% is optimal). Then you can focus on using the card and making payments on time to build a positive credit history for the both of you.

The car loan manager is right as well: without a credit history, his low credit score can actually hurt your chances of getting a loan or a lower interest rate. Putting your husband on your credit card (especially since he can not get one of his own) is the best way for him to start building a positive history. This is the single most important thing for him to focus on to improve his credit score right now.

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