Smart Money Blog

Let me start by saying that I have not personally tried this, but it does seem like a very interesting concept, and could even help you raise your own credit score if it needs a boost.

When you add another user onto your card, their credit score can, and will, greatly benefit from your usage, and prompt payments on that card. This is usually common knowledge, but now their are ways to profit with this method.

If you’re interested in trying this, I suggest clicking here, to check out the Washington Post article on the subject. This will give you some links, and more detailed information on the subject.

Obviously, if it is you that needs to raise your credit line, I suggest searching around for some family, or a loved one, with a solid score, and tell them that you’d like to be added as a secondary user on their card.  You don’t have to receive a card, use a card, or have any access to their account, and there is no negative impact on their score as a result of adding you.

You can add as many people as you’d like to a credit card, and I’d say it’s a great way to raise your score.  As far as selling your credit score, it is a security risk, but if you keep on top of your finances, it could be another great way to make some extra cash.

If you do decide to try this, please let me know how it goes so I can pass it along to other readers, and post it up in the forums.

Most of us have probably asked ourselves, at one point or another, just what exactly are they using to come up with that all important 3 digit credit score? The exact percentages actually change slightly for each individual, but this graph shows the basic layout of how credit scores are formulated.

Now that we know that what goes into your credit score, let’s look at how using the balance transfer method will affect that score.

Payment History - This is a positive category for us, making all of those payments on time will really improve your payment history, and the fact that it is more than a third of your score doesn’t hurt either.

Amounts Owed - This seems like it would be a negative category, but balances at zero percent do not go against your score. Much like unsubsidized student loans won’t count against you. If you keep your utilization in check, (look at FAQ for more info) this should also be a positive category.

Length of Credit History - Obviously there has to be a downside somewhere, and this is the main one, luckily it’s a much smaller slice of the pie. Opening up new cards will bring down your average length of account. This is the area that will originally drag that score down a couple points.

New Credit - Having new credit could be good or bad. All of the credit inquiries from the card issuers will hurt you in this category, but maintaining a positive credit history with the new credit should bring it back up. Therefore, I count this area as a push.

Types of Credit Used - Using credit cards would usually not be the best addition to this category, but the fact that it is at zero percent means it should not go against the score.

As I mention on the site, in the beginning, your score will usually fall anywhere from 10-30 points, but as you can see, after having the accounts open for a while and making your payments on time, not only will your score rebound, it should actually improve. I hope to put this up in the “Credit Basics” portion of the site once I polish it up.

Thanks to myfico.com for the graph and information on the subject.