hi, last year I decided to ask a relative to add me in her cc due her good credit score.. since she couldnt add me to an existing cc, she opened 3 cc and put me as authorized user,, After some months it was ok, it increased my score because the balance limits were high,,, now she had to use those cards due an emergency and they are maxed out,,, that is affecting me as well,,, should I ask her to call the cc companies and remove me as authorized user? will this work to have those accounts removed from my credit report? those cc are the newest lines in my credit history, I havent closed the oldest ones... I want to be sure if by doing that my debt ratio will be reduced and my score will be increased,,, Thanks in advance
Unless she defaults on those accounts your credit history should not really take that much of a hit. If she keeps on making regular payments without being late, your score will improve over time.
If you choose to take them off your reports - you will have to dispute them. AU accounts are some of the easiest to have deleted.
Thanks for the replies,, however those accounts are the newest ones in my report,, I help her paying a couple but still the cards are maxed out,,, since those ccs increase my total balance in relation to my limits, I was thinking in removing them,, to show just my own ccs which have low balances, around 40%.... should I do this? or just leave them there,, I am thinking in asking for a personal loan in a near future and I dont want to be rejected for to many ccs thanks
If it were me, I would take them off. Have the relative remove you as a listed AU first. Over-utilization can eat your FICO lunch.
That's true. Why wouldn't she add you to the older cards? She doesn't even need to give you the card. You only want the history. Opening new cards didn't really help you very much.
good news,, it works! Ok,,, my fico equifax score increased in 39 points, as today per myfico.com,, these last days she contacted all the ccs and 3 of them so far removed me as auth user,,, and they no longer shows up in my equifax credit report,,, I only care about equifax due most lenders only check this CRA,,, I never thought my score could increase like that in less than a week,, I hope to see a better increase when everything is done! hope this experience can help anyone else
Well, why it may have worked with respect to Equifax it may not the other two ("Trans Union" and "Experian"). I would still go ahead and contact those two and have them conduct a re-investigate them. By extension, they will be removed and your scores should elavate. Not to belabor the point but, I just can't get my head around why she would add you to brand new accounts. Typically, new accounts decrease scores and accrue no positive points until at least reaching six months of age.
good idea! I think since she used the equifax website, we both use it for the fico score, I think equifax is the one who updated my information quickly but IT IS A GOOD IDEA to contact the other 2, I will do it, thanks for the heads up! About your final comment, I always asked to be only added to existing accounts, the oldest ones, but she doesnt know too much about this credit stuff and she gave me this only option since she received these ccs offers via mail,,, so I had to accept. I will make sure Transunion and Equifax review my information, Thanks
Next time you need to let her know that you don't want the card to use. You only want her to add your name on to her old accounts so that you get the benefit of her good history. She should ask for the card to come to her and then never give them to you.
Allowing one to "piggyback" upon the credit history of another is an anethema to the entire concept of scoring one's own credit risk. I strongly support the efforts included in FCIO 08 to eliminate them totally. Aside from that, I would never let anyone with a higher credit risk emperil my years of hard credit work by putting them onto any of my accounts as an AU. Just my opinion.
You don't have to let them use the account, so it doesn't emperil your years of hard work. You add them, have the card sent to you, and never give it to them. They get the advantage of your history but not the use of the account. As far as FICO '08 goes, there are a lot of problems for anyone basing a decision solely on scores derived from that model. Search for FICO '08 or ECOA and you'll see a lot.
OK, Hedwig, flip the scenario around. The AU will definately be hurt by derogs caused the actual card holder. So it goes both ways. As for FICO08, I was not implying support of all changes proposed therein, and am aware of some that have not been defined that need clarification. I was only stating support for that portion that would eliminate AUs. FairIsaac is the industry standard for evaluating credit risk scoring. Their analysts state that is not fair. FICO has different scoring algoriths based on one's personal credit history, commonly called buckets, and lettling someone make unearned bucket jumps due to another's history skews the system for all of us. FICO is graded on the curve. I dont ever remember taking a math exam in college wheerin I could pay my math geek buddy, and thus take advantage of his exam score when grading mine.
Here is another rub on the potentail perils of AUs. I just re-read my CC Agreement with Chase on my business CC, and here is what was stated, verbatim, in my Agrreement: "You should think carefully before allowing anyone to become an authorized user because you are allowing that person to use the account as you can. You will remain responsible for the use of the account and each card issued on your account according to the terms of this agreement. This includes the responsibility for paying any charges on your account made by an authorzed user." "You must notify us to terminate an authorized user's permission to use your account. If you notify us, we may delete the account and/or issue a new card or cards with a differerent account number." Thus, you take on the peril, if you take on an AU and then delete the AU, of losing yur account history. A long-standnig account with 20 year history can instantly turn into a new account with zero history. That is mega. The fine print says a lot.
Most times that an account is closed and reopened with a new number, the history goes with it. I've done it a number of times. Besides, a business cc is different from a personal cc. It shouldn't be on your report at all. The system is flawed and skewed in many respects. Right now, becoming an AU to improve score is perfectly legal. Why not take advantage of it if it benefits you? And yes, a negative mark on the account holder would also taint the AU. At which time I would request to be removed as an AU.
I was never a fan of personally letting someone be an authorized user on any of my accounts. Nor do I want someone else's accounts showing on my credit report when if they default it can drastically affect the score. We were always reminding the loan officers at the bank to ignore au accounts when figuring up debt to income ratio on mortgage loans.
I suppose debt purchasers and the way in which they report doesn't factor into the "industry standard." Point I am making is that FICO models are flawed and if a consumer finds a tool to their advantage, use it.
