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My partner has approximately 8,000$ of student debt which we'd like to pay off. I have poor credit (or rather, no credit) and we have figured that paying it off "on my credit" would benefit both of us, ensuring I can build a better credit history.

Which of the following options would be best to improve my own credit while paying off her student loans?

  • Pay it off as one lump cash sum
  • Pay it off with my personal secured credit card
  • Switch the billing information to my own name and continue the existing payment schedule
  • Some other alternative option
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    Your partner's debts are not your debts and so paying them off will likely not affect your credit score. With regard to taking over the debt, student loans are different from other debt in that they survive bankruptcy, and if they remain unpaid (with or without bankruptcy) until you have started receiving Social Security benefits, the bank can even garnishee your Social Security benefits. Are you going to take over all these obligations from your partner? Will the bank let you do so?
    – Dilip Sarwate
    Oct 25, 2015 at 22:09
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    I'm assuming you're from the US, giving the student debt, credit score and complete disregard of the fact that there's more than one country in the world.
    – littleadv
    Oct 26, 2015 at 3:39

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None of these will work. These are not your debts, so whatever reporting is done with regards to them - will not be done on your name.

Switching billing to your name doesn't change the fact that your partner is the one who is liable for the debt.

If you're willing to pay off someone else's debt and use your credit card to do so, the credit card debt will be your debt and will be reported on your name. However, verify the following:

  1. The person whose debts you're repaying is getting a gift from you. Gift tax return may be needed. You may be liable for gift tax or will chip into your lifetime exemption.

  2. If this is not a gift, that person may not pay you back. Student loans survive bankruptcy, but private loan from you - doesn't. You may lose your money. Back to #1.

  3. Credit card interest may be much higher than the interest on the original debt.

  4. Girls (or boys...) don't date you because you have a perfect credit score. And those who do - don't date those. Unless you're planning on taking out a mortgage in the next year, there's no need whatsoever to improve your credit score.

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