Will Your Credit Score Improve if You’re an Authorized User On a Credit Card Account?

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Maybe your credit score is kind of lacking a high number, and you wish to do something about it. In fact, you want to know everything you could possibly do to help it get back into the high range as soon as possible. But how do you do that?

One way you could help improve your credit score is by signing as an authorized user on a credit card along with someone else. Though the good credit they currently have will not reflect yours, the fact that they will keep paying their bills on time will reflect on your score and make it improve. That is, only if you do not use that credit card account unwisely yourself.

If you were to sign with someone on a credit card, it is important that both of you agree to have good credit behavior. If you sign on with someone who is great with credit cards and has an awesome score, their good habits will reflect back onto your credit score simply because you share the same account. But if you use that credit card in a bad way, it will not only make your credit score even worse, but it will decrease theirs as well.

Being an authorized user allows you to gain a better credit score, but when it all comes down to it, you are not responsible for the debt. So, really, if you messed the credit card account up for the person you are signed up with, it is their responsibility, not necessarily yours, to pay the debt. Still, no intelligent credit card holder with a good credit score would allow someone who would inevitably ruin their credit and drag them into debt to be an authorized user of their credit card account, so you have to be trustworthy and try to break your bad credit habits.

You will not want to stay on these accounts any longer than you have to, especially if you are applying for a home loan. Though it improves your score, it can decrease your chances of getting approved for a home loan. So when you are signed on as an authorized user of someone else’s account, stay on only as long as it takes to improve your score enough to be on your own again.

One bad thing about being an authorized user on someone else’s account is that you put yourself at risk of being joined with someone who may not have the greatest credit history either, and who may not use the credit wisely. This will end up costing you even more of your credit score and leave you in a worse predicament than you were in to begin with. This is all usually determined by your judgement of the person who you are planning to share the account with, so you must be careful of who you associate your credit score with.

Is Credit Card Interest Ever Tax Deductible

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The end of the year has passed. You have survived the holidays, and now you are ready to move on with another year. After all, time marches on. But there is one thing that you have not yet done for last year that is completely unavoidable. It is your taxes. So you are trying to think of every possible way you could get a tax deduction. Then it hits you. Hey, is it possible that your credit card interest is tax deductible?

Sorry, but no. Unfortunately, unlike the interest you pay on your mortgage, your credit card interest is not tax deductible. But there is a way you can make it tax deductible. Still, there are some risks involved. Whether or not the risk is worth it is completely up to you. For you are the one who knows your circumstances. If you really want your credit card interest to be tax deductible, here is what you do.

Refinance Your Home

Sound ridiculous? If you are doing it just to get a tax deduction on your credit card interest, it probably is. If it is that important to you though, refinancing your home can help. It is possible for you to refinance your home and transfer the balance on your credit card to your home loan. That way, you have basically paid off your credit card and do not have to pay interest on it anymore. Now, instead, you have more interest to pay on your home loan, or your mortgage. That kind of interest is in fact tax deductible. By putting all the money you owe from your credit card onto your home equity line of credit, you allow for the interest on your credit card to change to a different type of interest, making it tax deductible.

Risks

You could lose your home. It is kind of a scary statement, yes, but it is in fact true. Not necessarily just because you refinanced it to get your credit card balance transferred, but because it may take longer for you to pay off your home loan. Because it would take you longer and make your balance bigger, it may be difficult to make monthly payments in full and on time.

Whether refinancing your home to get a little extra money from your taxes is the right thing to do is up to you. In my opinion, it is definitely not the wisest thing to do. Better chances of keeping your home is way more important than getting money back from the interest you paid on your credit card. To me, the risk is just too big to take. Having a home loan is burden enough.