How to Help Someone Else Improve Their Credit

If you have above average credit or have raised your credit score substantially, it can be incredibly difficult to watch a friend or loved one make credit mistakes. Read more to learn how you can help someone else improve their credit.

If you have good credit and you want to help someone else improve their credit, there are a variety of things you can do. It is important, however, to carefully consider whether or not you want to assist someone else with their credit, as it could have negative impacts for your credit if it goes wrong. I personally would only consider helping someone else improve their credit as a parent trying to help a child.

First, you could consider paying off a bill. If you have a family member or a close friend who is going through a challenging financial time, paying off a bill could help them in maintaining their credit score. While you certainly have the financial expense of paying for the bill itself, you do not have any other connections to that individual financially, so it will not impact your credit score at all. Instead, it will simply help your family member or friend avoid missing a payment, which can negatively impact their credit score. This would be my top recommendation if you have a family member or friend who is going through a brief rough patch.

Another option is for you to make someone an authorized user on your account or credit card. This allows the individual to benefit from your good credit score and develop their own credit history. Many parents choose to make their teenage children authorized users, as they can track spending and purchases as well as give their children the opportunity to develop a credit history. Obviously, you can make anyone an authorized user on your account, but since poor credit decisions from the authorized user can impact your credit score, it is important that you are wise about who you make an authorized user on your account.

Finally, you can be a cosigner on a loan or a credit card, which can assist someone in establishing good credit. My father personally cosigned my credit card so that I was able to get one when I turned eighteen. Because he cosigned, I was able to get a regular credit card and develop a good credit history. My father, however, was responsible for making payments if I had not, which could have negatively impacted his credit score if I had been irresponsible.

In conclusion, if you have a good credit score, you have the ability to help someone else improve their credit through paying a bill, making someone an authorized user on your account, and cosigning for a loan or credit card. Remember that in the case of the latter two options, you are responsible for making any payments if the other person does not. As a result, making someone an authorized user or cosigning a loan or credit card can be more high stakes in helping someone else improve their credit as it could impact yours.

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