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My girlfriend has been unable to get a credit card because of an outstanding (and, we think, fradulent) debt on her record. We tried to contact the collection agency using the address listed on all three of the credit bureau websites, but the mail got returned. Since then, we've filed disputes with all 3 bureaus. One took the collection off immediately, the other two are still under review.

Bank of America (where she's banked for years) turned her down for a credit card, as did USAA (she's military), which was a little odd to me. Of course, she can't even get a store card, since she needs an existing credit card to qualify. She has 2 or 3 student loan accounts that have been paid on time, in full, each month for the last 3 years since graduation. Her mom convinced her (back in the age of easy credit) that she didn't need a card.

Now, unfortunately, in the tighter credit times, needing credit to get credit is a downward spiral, and she's somewhat stuck. Her joke is that she and I should get a joint credit card. My standard reply is that she should get a joint card with her parents. Her standard reply is that she's sort of done asking her parents for stuff.

Given that she's fiscally responsible, employed by the military, and has never defaulted/late paid, would it be okay to open a joint account with her? We've been together a few years, so she's not really a flight risk. If things go south, I can always pay off the account (I'm figuring on having a low credit line) and close it. If things go well, this will help her establish some credit.

Can anyone poke holes in my idea/give some precautions? Thanks!

  • @ Chris - thanks for updating the tags. I wasn't sure what else to put! – awshepard Aug 24 '10 at 15:52
  • You're welcome. Good question, BTW. – Chris W. Rea Aug 24 '10 at 18:19
  • Are those low-limit "prepaid" cards still available? Are they worth anything in terms of building credit? – bstpierre Aug 25 '10 at 1:01
  • In the US (and maybe elsewhere too), a typical credit card account has one (primary) card-holder who is the one to whom the credit is extended. The primary card-holder can ask for additional cards to be issued to other people on the same account, but the primary card-holder is responsible for all charges made by the secondary card-holder(s). Recently, CapitalOne re-issued cards with different account numbers on the cards for the secondary card holders, but billing is to the account of the primary card holder. So, be sure you understand what exactly a "joint" credit card account means. – Dilip Sarwate May 13 '15 at 13:26
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    @bstpierre prepaid cards do not help build credit. Secured cards do. – Xalorous Sep 2 '16 at 20:59
31

I wouldn't cosign with your girlfriend. That has the potential to put a divide between you two. At the very least it will make you feel more like a parent by watching over her and already planning to be able to bail her out and less like a partner.

Waiting on the fraudulent charges to be removed, while slow, sounds like the best plan.

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    wouldn't that also have the potential to put a divide between a husband and wife? yet they do it all the time :) – Michael Pryor Aug 24 '10 at 16:00
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    @MichaelPryor :) I'm in a partnership with my wife. We sink or swim together. I don't have money, We have money. I don't plan for retirement, we plan for retirement. We also have no doubt that we'll retire together. I don't believe that a boyfriend/girlfriend relationship is of the same caliber as husband/wife. – Alex B Aug 24 '10 at 16:57
  • +1 for the parent watching issue if the relationship isn't strong enough. That doesn't mean marriage to me necessarily (people can be in a partnership without the official approval of the state they live in) but I wouldn't do it unless you already happen to feel this is your last relationship. – MrChrister Aug 24 '10 at 19:35
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    "Before you loan friends or family money, ask yourself which you need more." – fennec Aug 24 '10 at 21:16
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    As soon as you start doing joint stuff like credit cards, checking/savings accounts and mortgages/property ownership, your credit scores are tied together. Hers won't be raised to meet yours, yours will drop to meet hers. This will increase your cost of borrowing and limit both of you in your financial dealings. Get the fraudulent charges removed first as suggested. – Jerry Penner Sep 27 '13 at 19:39
12

Instead of saying yes or no, I would suggest an alternative -- help her get a secured card in her name. They count as credit cards, they get reported to the credit bureaus, the amount doesn't need to be excessive (250 to 500 would be a respectable amount) and the better ones will frequently add unsecured credit as you show that you can use it.

It need not be a loan, so the tension associated with that can be completely avoided -- make it a gift, an investment in your future together. She doesn't have to stress over repaying, you don't have to stress about damage to your credit or missed payments.

And she gets what she obviously wants -- help rebuilding her credit.

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    Came here to say this.: She should get a secured credit card. They'll have her put an amount (like $500) in a CD account, and that account will stand as collateral for the card. After a certain amount of time, the collateral will be released and the card converted to a normal credit card. – Xalorous Sep 2 '16 at 20:57
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    Also, OP should let GF make the security deposit herself. If all he provides is the idea, this will build her knowledge, confidence AND credit score. Also point her to this SE and the PF subreddit. Both will instruct on the best way to build credit history. In short, pay all bills on time and use one credit card, use it at least once a month, pay the balance on the statement in full as soon as the statement is received. Repeat for a year for a nice foundation for credit history. Repeat throughout life for sterling credit. – Xalorous Sep 2 '16 at 21:09
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Sounds like you just need to give it some time for the fraudulent charge to be remediated by the other credit agencies and have her try again.

If the other agencies give you guff about it, you might be able to leverage the first agencies decision to strengthen your case. Alternately, you could have her re-apply for the card anyway, and when they reject you call their customer service people and appeal her case using the documentation of the debt being invalid from the one credit agency as leverage.

6

It could be ok. If you are living with her, and essentially acting as domestic partners, it's a decision you could make if you choose. Your cons are it could cause tension between the two of you that you don't have already or she could leave you with a lot of debt or scam you in some other way. The pros are you'd be doing her a giant favor and would be taking the first step to figuring out a solution to your shared fiscal problems.

The internetz aren't going to be able to answer this for you. We can only tell you what bad things might happen and you probably already know them. You'll have to make the decision that's right for you.

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    I like this: "The internetz aren't going to be able to answer this for you" :) – Alex B Aug 24 '10 at 16:57
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    nonsense, all the best advice comes from strangers on the internet. – MrChrister Aug 24 '10 at 19:36
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    @MrChrister, glad to see you here! I'm that prince from an unheard-of African nation who wrote to you about a small liquidity issue I can remedy with some minor details about your bank account, after which I will deliver poorly-spelled payments to you in much larger amounts! – Jaydles Aug 27 '10 at 20:09
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Many of the other answers point out the pitfalls or reasons why you should consider not signing.

Here's an additional precaution: if you do end up co-signing on a credit card, make sure it has a fixed, low credit limit. Nothing more than you'd be willing to lose if she were to max it out and leave you tomorrow (as horrible as that would be). I'd bet most people would feel like $500-$1500 is a reasonable upper limit for this starter card.

The other advantage to having this fixed/low credit limit is that interest rates should be lower than high limit cards, so if the worst case happens and you cant pay off the debt within a month, the interest rate will be ~16% not 25%.

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Have her get a Debit Card. This will work great as long as she doesn't need to take on additional debt.

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    The goal is to build credit history. Debit card does not do this. – Xalorous Sep 2 '16 at 20:58
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Why not add her as an Authorized user to an account you hold, but then not give her a card. She gets the benefit of your good credit, and you don't run the risk of your GF running up your debt.

  • This does nothing to build her credit. – Xalorous Sep 2 '16 at 20:58

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