Credit Cards

[FicoHound007]

I am in the rebuilding phase when it comes to credit. I have paid off all the bad debt and now I need to re-establish. I have been added as an authorized user to a CC with a credit limit of 15k and only $300 balance.

My question is, as an AU does this help my credit score?

[YoungEntrepeneur]

It helps as long as the AU account contains a postive payment history. Have you applied for any cards yet? Are you a student?

[annointedWRX]

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FicoHound007 wrote:

My question is, as an AU does this help my credit score?

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The short answer: Yes.  That is, if you're a legitimate AU, then it is likely that being added as an AU on an account that improves your AAoA, overall CL, util, etc, will bode well for your FICO score. 

It depends which year/version FICO scoring system a creditor uses, and whether you are a legitimate AU, rather than trying to game the system by being added to a stranger's account.  The most recent system, FICO 08, which I understand to only be used by few creditors, has safeguards against illigitmate AU piggybacking, but continues to allow traditional AU accounts (ie, parents/spouse adding you as AU) to be factored into your FICO score.  Nevertheless, the actual 08 scoring system has some unknowns, as there is speculation as to how it determines whether an AU account is legit, whether the new scoring system allows more than one AU account to weigh upon scores, etc.

[FicoHound007]

I think this is all good news to me because the account is my dads. He has had this account opened since 2003 and score of EQ 840(when he purchased a car last year) so i think it's safe to assume he's never been late.

What would be my next step?

This is what shows up on my CR:

5K car loan just opened two months ago (of course never been late lol)

this new CC as a AU

3 paid collection that I am in the process of sending GW letters to CA

2 collections accounts that the CA has removed from CR but the OC still shows as "transferred" or "sold to lender" 

Any help would be appreciated

[Alsofromabroad]

Becoming an AU used to be a great way of establishing/rebuilding credit if the credit habits of the primary account holder were pristine. However, this all changed in 2008 because credit repair agencies were making liberal use of this tactic and FICO outlawed the ability for AUs to raise their scores in this manner. The answer to you question is that becoming an AU now has a neutral effect on your FICO score, whether the primary account holders' habits are positive or negative. If you want to learn more about this, click on the following link:

http://www.credit.com/credit_information/credit_report/Consumer-Alert-FICO-Formula-Changes.jsp 

[haulingthescoreup]

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Alsofromabroad wrote:

Becoming an AU used to be a great way of establishing/rebuilding credit if the credit habits of the primary account holder were pristine. However, this all changed in 2008 because credit repair agencies were making liberal use of this tactic and FICO outlawed the ability for AUs to raise their scores in this manner. The answer to you question is that becoming an AU now has a neutral effect on your FICO score, whether the primary account holders' habits are positive or negative. If you want to learn more about this, click on the following link:

http://www.credit.com/credit_information/credit_report/Consumer-Alert-FICO-Formula-Changes.jsp 

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This is not correct. FICO 08 was amended to credit AU accounts, but there will be an effort made (no clue what it might be) that there is some sort of relationship between the cardholder and the AU.

Also, we still don't know of any lender using FICO 08 yet. Not to say that it hasn't happened, but lenders are famously slow to switch scoring formulas.

[specultr]

x

[smallfry]

My 18 yo is AU on 4 of my accounts and has 3 school loans. She also has a new AMEX. Her EQ is higher than mine so I think it does help.

[haulingthescoreup]

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smallfry wrote:
My 18 yo is AU on 4 of my accounts and has 3 school loans. She also has a new AMEX. Her EQ is higher than mine so I think it does help.

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Ahhh, to be young!

[FicoHound007]

FYI.......

AU is a great way to go. I just ran my credit(i believe it was EX) and it reported the AU account. Score went from 590 all the way up to 646. Not bad for one days work =)