When it comes to building a good credit score, the most important thing to do is make your loan payments on time. Creditors report your payment history on your accounts to the major credit reporting agencies, and a single late or missed payment can knock dozens of points — even as much as 100— off your credit scores. By making payments on time month after month, you’re making huge progress toward a strong credit history.
But what if you’re making payments on a loan that technically isn’t yours? Say your paycheck goes toward paying the mortgage, auto loan or credit card bills, but those accounts are in your spouse’s name — can you get that payment history to show up on your credit reports?
If you’re not the account holder, the answer is no, according to David Blumberg, public relations director for credit bureau TransUnion.
“In order for it to appear on a credit report and help build credit history, the person paying needs to be a co-signer on [the loan],” Blumberg wrote in an email.
While you’re not getting to the “good credit” for making the payments on a loan in someone else’s name, you also won’t see your credit score suffer if you fall behind — the account holder will.
In some cases, the loan in question may be assumable, meaning it can be transferred to a new account holder. You’ll need to check with your lender to determine if that’s possible, and keep in mind the new borrower will need to undergo a credit check. The lender will want to make sure the new borrower is just as (if not more) likely to repay the loan as the original borrower was when the lender approved them. Showing your proof of payment history on the loan may be helpful in this process.
Unless you go through the steps of transferring the loan, all you’re doing is giving that good payment history to someone else. You may have the gratitude of the person you’re helping, but that won’t translate into a good credit score, said Rod Griffin, director of public education for credit bureau Experian.
“The loan can only be included on the report of the person specified in the contract as the responsible party,” Griffin said in an email.
Making sure your payment history on any loans, lines of credit and credit cards that you are legally responsible for is being reported correctly is one the biggest reasons to check your free annual credit reports. You have the right to dispute any errors, and if you have a question about how your creditor reports your account information, you may want to reach out to them directly to get answers. You can stay on top of your credit information by getting a free credit report summary every 30 days on Credit.com.
More on Credit & Credit Cards:
- How to Get a Credit Card With Bad Credit
- An Expert Guide to Credit Cards With Rewards
- How to Get a Credit Card With Good Credit