Dear Credit Care,
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My husband had a joint credit card account with another woman a few years ago of which I was unaware. We are now in the process of buying a house and had to pull his credit report. To my surprise, there is a $10,000 past due account which now affects whether we get the house. How can I resolve this? I don't know the credit card number, and I don't have that amount of money to pay.
The first thing I would recommend is that your husband double-check to confirm that he is a joint owner of the credit card account, and not just an authorized user. As an authorized user, he is not financially responsible for the amount due; as a joint owner of the account, he is responsible. The contact information to reach the creditor to find out what you need to know will be included on the credit report.
Next, review your husband's credit report to learn how the past due account is reported. For example, the account could be 30, 60, 90, 120 days late or it could have been charged off already by the original creditor.
The best course of action regarding the account will depend on where it is in the past-due process. Should the account be reported as late, but not yet charged off, you and your husband would have the option to make the payments necessary to bring the account current. For instance, if the account is reported as 60 days late, you would need to pay the minimum amount due plus any fees for those two months in addition to the current month's payment. In this case, once those payments were made, the creditor would then report the account as paid as agreed because the account would no longer be past due.
Give it 30 days for the credit report to reflect the new payment status. Need it faster? A rapid rescorer may be able to fix your credit in a hurry.
If this account is the only negative on your husband's credit report that is affecting your ability to qualify for a mortgage, these steps to change that account's status back to positive should solve the problem.
The other action I would recommend if the account is not yet charged off is for your husband to request that the account be closed. As a joint owner, he should be able to close the account and prevent the other owner from adding any new charges to the existing balance. You'd still be responsible for paying the balance, though.
If the account has already been charged off by the original creditor, it is likely your husband's credit report also contains a collection account associated with the original account. The collection account will be listed in the negative accounts section of the report and will have a balance that closely matches the original charged-off account. As long as your husband is a joint owner of the credit card account and subsequent collection account, he will need to make arrangements to pay what is owed in order to qualify for a mortgage you both can afford.
Ideally, the other owner of the account will do what is necessary to pay off the account, but I believe you would be wise to make payment arrangements with the collector yourself if you want to qualify for a mortgage sooner rather than later. Many lenders will move forward with a loan as long as you have a payment plan in place that you can afford with the collector, in addition to your other credit obligations and the new mortgage loan. You could then attempt to collect what you and your husband pay on the account from the other owner of the account.
The other option that you may have is to attempt to qualify for a mortgage loan without your husband. Depending on the purchase price of the home you have in mind, this option may not be a viable one, but is something you could investigate with your lender.
Handle your credit with care!