Credit Questions? We've Got Answers!

This past year I had the pleasure of speaking at a MoneyWise Women Conference. It was a fabulous experience. I learned a lot myself from the other speakers!

Some of the attendees in my session about credit reports and scores asked some excellent questions about their credit. Because these questions are ones I get often, I’d like to share my advice here in case it may help you, too.

“Donna” asks: I have a zero balance unused credit card and an active high balance card. Should I split the balances to reduce the amount of available credit I am using?”

In my seminar, I warned that carrying balances that total more than 10% of your available credit on your credit cards can hurt your credit scores. So Donna wants to know if shifting her balances around will help her credit scores. The answer is not really. FICO tells me you won’t outwit the scoring system that way.

However, I do want Donna to keep her options open. She should use that card with a zero balance – even if it’s just to charge gas and groceries. She can pay it off in full, but she should keep it active or risk having it closed by the issuer.

“Julia” wants to know if she and her husband should have separate credit cards. She asks, “Does it matter or because we are linked anyway? FYI – neither of us has great credit.”

Just because you are married it does not mean you have merged credit reports. You each have separate credit reports and only joint account will appear on both your credit reports. If one of you had great credit, that person could add the other to an account as a joint accountholder on a card (preferably one with a long payment history and little or no debt), and probably see a boost in their credit scores. But since you both have not-so-great credit, I would not recommend you add each other to your accounts. The benefit of separate credit scores is that if one of you makes progress in improving your credit, your spouse’s problems won’t drag that down.

I’ll answer more credit questions in future posts. In the meantime, Happy New Year!

             
Helping consumers find reliable answers to their credit questions has been Gerri Detweiler's misson for the past 22 years. She is the co-author of Reduce Debt, Reduce Stress: Real Life Solutions for Solving Your Credit Crisis and serves as Credit Advisor for Credit.com.

Comments

[Lillie]

Do you have a current schedule of when your conferences are offered for this year? This would be a great "girl's night out" event that would be fun and financially rewarding.

[Union Glashutte Watches]

Thanks for the advice. I don't have hardly any credit, while my husband's credit is quite poor as he inherited a lot of debt from a divorce. I am happy to know that I have made a good decision in keeping our accounts separate. Thanks.
-Sylvia

[Sue Holm]

Gerri -- Thanks for a great post. These are some of the most common credit questions. It's good to have a reliable answer.