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Regular Contributor
Posts: 214
Registered: ‎08-02-2013
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Authorized User help?

[ Edited ]

Hi everyone,

 

I was wondering how AUs work in the credit world. I know that I "piggyback" on someone that has already established a credit history but what are the advantages and disadvantages of doing so?

 

1. Do I sign up for the same card as the one my parent is using?

2. If my parents FICO score is not that great, will that make me start at a poor score as well?

3. If my parents were to miss a payment, would that affect my credit history?

4. Do all CC vendors allow AUs on their cards?

5. Is there a way to graduate from an AU to a regular account?

6. If I were to close an AU account, what are the ramifications for doing so?

7. As I do well with an AU card, will that boost my credit score? Or just my parents?

 

EDIT:

 

8. I see that AMEX does an ACM instead of AU and will I be able to backdate to my AU opening date later when I apply for my own AMEX card?

 

Thanks everyone

Moderator
Posts: 27,207
Registered: ‎09-13-2012
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Re: Authorized User help?

[ Edited ]
1. Do I sign up for the same card as the one my parent is using? AU are additional users on an existing or newly opened account. The primary cardholder would request the AU

2. If my parents FICO score is not that great, will that make me start at a poor score as well? It would depend on if their score is poor based on the card you are an AU on. You do not inherit their entire credit history. Only the history of that account -in most cases

3. If my parents were to miss a payment, would that affect my credit history? Yes, again only on the account in which you are an AU

4. Do all CC vendors allow AUs on their cards? Usually yes

5. Is there a way to graduate from an AU to a regular account? It is not your account. In order to have a 'regular account' you'd have to apply and be approved

6. If I were to close an AU account, what are the ramifications for doing so? You cannot close an AU account. Only the primary cardholder can cancel your AU. Some lenders require the entire account be closed and the primary cardholder would have to reapply.

7. As I do well with an AU card, will that boost my credit score? Or just my parents? If the account is in good standing it will help you.

8. I see that AMEX does an ACM instead of AU and will I be able to backdate to my parent's opening date? No
Regular Contributor
Posts: 214
Registered: ‎08-02-2013
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Re: Authorized User help?

[ Edited ]

Thank you Lexie, you have been a big help to me.

 

I have another question, if my parents charge a lot on let's say an American Express Costco card, will my credit utilization shoot through the roof since it would be my only card?

 

Also, will I be able to backdate to my AU opening date when I apply for my own AMEX card?

Moderator
Posts: 27,207
Registered: ‎09-13-2012
0

Re: Authorized User help?


I have another question, if my parents charge a lot on let's say an American Express Costco card, will my credit utilization shoot through the roof since it would be my only card? Yes, your util is tied to the rev cc. If this is your only cc, it would not be a good idea. The best cards are long established history, with no derogs, high CL and low balance.

Also, will I be able to backdate to my AU opening date when I apply for my own AMEX card? In most cases yes. Amex keeps very good records but as Crashem noted on another thread its best to establish an online account when you are an ACM to be safe.
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