Expert: Yan Ross - 12/27/2009

Question
Through a combination of my mother's knowledge and my research/work, I started early and have built up a nice credit score at only 24 years old. My wife's family was less adept and she's only had a credit card for a couple years, which hasn't worked out so well. She's been held at a low limit which has left her close to maximums and kept her APR quite high. I'm trying to see what we can do to help build her up to where I am without putting too much risk on my score.

We currently have three cards: one in my name, one in my name with her as an additional card, and one in her name with me as an additional card. Usually, they say not to close accounts even if they have high rates, so I'm guessing we should leave the account under her name open, though I'd rather quit putting charges on it. Would getting her an additional card on my second good account and having both of us just spend on my two accounts help her at all? Do we need to open a joint account and let her build through that?

Thanks for any and all advice, looking to get us on a great track starting in 2010 so we can be prepped for some car and hopefully house payments in a couple years.

Answer
Justin,

Nice to see you looking toward the new year with such thoughtful questions.

While there is not an exact one-for-one relationship between your actions and the credit scores, your suggestions are generally on target.

I'd suggest also that you do keep using your wife's credit card, preferably in small amounts and paying it off in full each month.  That would not strain the utilization ratio, but would build her record of timely payments.

I don't think it's necessary to add another joint account, though it could help -- but only assuming that you are not racking up a lot of credit inquiries and also assuming that you are using the cards sparingly and paying them off in full each month.

You should also consider such issues as whether you are planning to make any major purchases (auto, home loan, etc.) any time soon -- that would affect a decision about adding more credit card accounts in the short term.

Remember it does take time to build a credit record, and it sounds like you are taking the right steps.

I hope that helps.

Good luck -- and best wishes for the new year!