How Can Someone Improve Their Credit Score When They Can’t Get Approved for a Credit Card?

Question from GA: How would someone with a poor credit score go about improving their credit when they can’t get approved for a card, not even a secured one? I am trying to purchase a house with my partner. I have good credit, they do not. But my credit doesn’t matter because my income is so low it can’t be used towards the home. They had one student loan that was delinquent for years, it was a significant amount that was recently paid off. Their only other credit is for a car loan that they are still paying on but a family member had to cosign for it. They were saving their money in cash and recently deposited it in the bank. They applied for a regular credit card and got denied due to delinquency, after the student loan was paid they applied for a secured card and were denied again both through their bank. How can I help them? Can I get a credit card or small personal loan and put them as an authorized user to raise their credit? The problem there is that my income is so low that the only reason I would get approved is because the bank account is a joint with a family member. I’m not sure if it’s joint but they helped me to open it using their account. They can access my money but I can’t access theirs. My partner makes a decent income, pays all our bills on time but does struggle to save because there isn’t much left.

Improving a poor credit score can be challenging, especially when you’re unable to get approved for a credit card. However, there are several strategies that can be employed to help improve your partner’s credit score.

Pay Bills on Time

The first and most important step is to ensure that all bills are paid on time. According to Experian, one of the major credit bureaus, payment history is the most significant factor affecting credit scores, accounting for 35% of the total score. This includes not just credit card bills, but also utilities, rent, and other recurring bills.

Reduce Debt

Reducing the amount of debt owed can also have a significant impact on credit scores. This is because the amount of debt owed accounts for 30% of the total credit score. Therefore, paying down the car loan can help improve the credit score.

Authorized User on a Credit Card

Adding your partner as an authorized user on your credit card can help improve their credit score. As an authorized user, they will benefit from your good credit habits. However, this strategy comes with risks. If you fail to make payments on time, both your credit scores could be negatively affected.

Consider a Credit-Builder Loan

If your partner is unable to get approved for a credit card, they might consider a credit-builder loan. These are small loans offered by some credit unions and banks to help individuals build credit. The money borrowed is held in an account by the lender and released to the borrower once the loan is fully repaid.

Check Credit Reports Regularly

Lastly, it’s important to check credit reports regularly. This can help identify any errors that might be negatively affecting the credit score. According to the Federal Trade Commission, one in five people have an error on at least one of their credit reports.

  • Ensure all bills are paid on time
  • Reduce the amount of debt owed
  • Add your partner as an authorized user on your credit card
  • Consider a credit-builder loan
  • Check credit reports regularly

Remember, improving a credit score takes time and patience. But by following these steps, your partner can start to see improvements in their credit score.

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