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My S/O and I have been together for ten years (not married). We started attacking all of our debts starting October 2018 in order to move into a house debt-free (except a mortgage) in 2021.

My last debt, a car loan, will be paid off in November. I've maintained a 750-800 score for several years, and I will have paid off ~55k in two years.

Her last debt was going to be some old medical debt that went into collections. We were going to try to settle with the collections company, but they have since been removed from her credit report. She has never had a credit card, etc. so she now appears to have no credit score.

What is our best path forward in order to have the best odds at getting approved for a mortgage in approximately one year's time?

  • Should we be adding her to my credit card accounts (which I just use to funnel bills through, collect points, and maintain a good score)?

  • Should we do the above and have her open credit accounts in her name as well?

  • Should she do nothing at all?

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First off, good work, pat yourselves on the back. I am super proud of you both. This was hard work and a heck of an accomplishment.

Credit scores are a funny thing and you will get a lot of conflicting advice on the subject. Keep in mind, that anything above 720 does not really matter for a home. Once you are above that point, the only thing that matters is down payment. Much of the published data is out of date as FICO continually updates their algorithm to calculate score.

One solution, since you are not married and if you intend not to, is that you buy the home on your own and she "rents" from you. This would make a clear legal distinction about who owns the property in break up. If that is acceptable, then nothing needs to be done on her part.

If you are going to buy the home jointly, then it will certainly help if she has a credit score. What worked for my wife and I was that we closed all but two charge cards. One for personal, one for business. She was joint on the accounts with me. In a few months we both had very high credit scores. Keep in mind this is contrast to much of the published advice, but our scores hover in the 810 area.

It might drop down to 780 or so, when we pay for the family cruise due to high utilization. But even that does not matter. First you would not do that when you were trying to qualify for a mortgage. Second, at that score, you would still qualify for the best rates.

One key to remaining out of credit card debt is to use your charge card only at places where you do not have to make a decision nor charges you a fee. Utility payments, gas (at the pump), and insurance premiums are great choices if they do not charge a fee. For example my light bill charges a fee, so I do not use a credit card, but my water bill does not so I do use my credit card to pay it.

Places like restaurants and grocery stores are terrible places to use a charge card because you will spend more than using cash or debit.

If you do buy jointly please budget in a legal document that describes the arrangement and what happens if one person seeks to break the contract. You are entering into a business relationship and married couples get this for free which is why traditionally it is not necessary for them.

Good work to both of you!

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There is little difference in the effect on her score between being added to one of your cards, or having her own - but it might not be easy to get an own card without a score.

So the simplest way is to request a second card.
There is no need to ever use the second card, you can as well destroy it right when it arrives, if you prefer.
Both card holders get the credit score effect of the common account - positive or negative.

Congrats from me too. You are on the right way!

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