You pay all of your bills on time, you keep a low percentage ratio of debt-to-credit-limit, you have a great mix of credit types – yet you are still saddled with a bad credit history. How did this happen? It is possible that your score could have been damaged by a loved one.
When you cosign a loan for a friend or family member, you are essentially agreeing to foot the bill if they end up skipping payments. It is a joint agreement that holds both parties equally responsible, and reflects on each of your credit scores in the same way. Banks often require new borrowers to obtain a cosigner before they are granted a loan, and if you are asked to do this, make sure you wholly trust the person not to damage your finances before following through.
Similarly, opening a joint credit account with your spouse, or becoming an authorized user of a credit account, will affect your score as well. So it is important to make sure that he or she is in good financial standing before making this decision. Depending on which state you live in, any separate credit account is the sole responsibility of the borrower, although some states hold that any debt accrued during a marriage is the responsibility of both parties.