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Credit Report Blunders Affect Both Card Users

By Faye Mergel
Published: Saturday, January 9th, 2010

It is quite common to see couples share credit card accounts, but experts remind card users that their actions have consequences to their partners.

Credit Report Blunders Affect Both Card UsersAuthorized users can benefit from sharing an account with another person since the credit bureaus will begin merging credit report information once a card is shared. Sharing an account with a person who has an excellent payment history and wise spending habit can make one appear less risky to creditors. This allows authorized users to get loans and insurance policies at lower costs.

However, experts warn that an authorized card user could suffer if the primary cardholder makes a mistake. Jose Rivas, of the Consumer Credit Counseling Services of San Francisco says late payments, repossession, bankruptcies, or collection accounts or judgments are some of the most damaging items to a credit report.

Banks track an authorized user’s activities and report them to the three major bureaus. Once they receive information from creditors, Equifax and TransUnion record both positive and negative information on a credit report. Meanwhile, Experian only records positive information from an account.

Finance specialists warn that any credit report that shows negative data can greatly affect a person’s creditworthiness. This makes loan qualification tougher for consumers since majority of creditors pull out credit reports from Experian, Equifax, and TransUnion before they make lending decisions. Moreover, employers and landlords check a credit report before hiring job applicants or providing lodging to potential tenants.

According to specialists, authorized users who do not want to see their partner’s slip-ups appear on their credit report may contact their card issuer and ask them to distance their accounts. This may take away some positive information on an authorized user’s report, but it would at least keep the authorized user’s mistakes from hurting his creditworthiness. Experts warn that recently committed mistakes, such as missed payments, have significantly more adverse impacts that those who have been on a credit report for years.

If an authorized user or a primarily cardholder wants to detach his account from his partner, experts suggest calling or writing the card issuer and asking them to remove his name from a card account. This removal will take effect immediately, but experts warn that piggybackers, those who carry another person’s name in their accounts to help with his credit, will take longer to free themselves. Experian said it could take 30 to 60 days to remove another person’s information on a piggybacker’s report.

Experts say it is best to talk with a finance adviser before making decisions. They note that there are many non-profit counseling organizations out there that are willing to extend help for free.

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