My husband and I took advantage of the recent drop in interest rates to refinance our home. (It is amazing how much money you can save by lowering your interest rate by a point!) We signed piles and piles of paper work at closing, but there is only one document than stands out in my mind — the page that contained my husband and my credit scores.
Because we have always been very mindful of our finances and our credit scores, we both have good credit scores. And it has always been a tiny rivalry between my husband and I as to whose score is higher. I am happy to report that I am gaining ground, at the time of closing my credit score was only one point behind my husband’s. Go me!
I recently read an article about ways that women can protect their finances when they move in with someone. There were some great tips in the article, but I think they missed one of the biggest tips — putting bills in your name to build good credit.
No credit is as bad as bad credit, and many people fall into the trap of putting all of the bills in one person’s name. While it may seem like the easiest thing to do, putting all of the bills in one person’s name can leave the other person with no credit.
5 Things to Put Your Name On To Build Good Credit
- Cell phone bill – These days everyone has a cell phone. Keep your cell phone in your name.
- Lease / Mortgage – When you move in with someone, both names should be on the lease or mortgage. Not only does this protect you long term, but it also allows both partners to build good credit.
- Credit card – Even if you don’t plan to use a credit card, opening a credit card in your name can help establish a history of good credit (as long as you pay your bills on time). Keeping one open for emergencies provides you with a safety net and a credit history.
- Utilities – Some utilities can be put in multiple names, some only a single name. Split them up. Keeping up with power, water and phone bills is an excellent way to build good credit over the long term. Plus utilities are a great place for starter credit since you can typically open them with little or no credit in your name.
- Car loans – Since you will likely have your vehicle for a long time, this is a great place to establish a long credit history. If you don’t have enough credit to get a loan on your own, your partner can co-sign for you, but make sure you get your name on the car too.
Of course, the number one key to establishing credit is to make sure you pay all of the bills in your name on time. Late and non payments can damage your credit score much more quickly than you can establish good credit. So never put your name on a bill that someone else is entirely responsible for paying. Building credit in your name means that you are sharing the responsibility for paying that debt.
Unfortunately, there is no quick fix for raising your credit score. And once you damage your credit score, building it back up again is tougher than establishing new credit. But if you work at it slowly over time by keeping regular bills in your name and paying them off in a timely manner, you can build a good credit score. The time to start building good credit is today.
Building good credit in your name is one tool in your financial tool box.