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I am helping my brother apply for a Citi Forward Card for Students as he is in college, living at home. I listed his income as 10,000. Got an instant decline. 740 FICO, thin profile. No student loan debt, or other debts.
I called recon and was told it was declined due to the other credit line being extended to him and being utilized as to high compared to his income. He is an authorized user on this other card which has a 30k limit. Perfect payment history, utilization I assume is high as it's just on auto pay, pay in full every month.
I'm confused as to why Citi doesn't see that he is not the primary holder of the card, and is simply an Authorized User. Since they are treating that card on his credit report as compared to his income, I asked if I could include the household income as well. They stated I could not. This does not seem right to me. It's a student card, I'm sure many other students are authorized users on parent's accounts.
Why are the lendors treating the authorized user card debt as his own, but won't allow him to include household income?
I guess the only thing he can do is go for a secured card then? What alternatives are there?
@09Lexie wrote:
Besides the AU, what other credit does he have?
He doesn't have any other credit. Just the AU card.
@09Lexie wrote:
Some lenders do not consider AU history at all (Chase for one). Being added as an AU is nice but it comes with the drawbacks you mentioned. If the card has a high util then the lender can use that as a calculation to determine risk for their product.
Others can chime in but off the top if my head I can't think of a lender who will not calculate the util in as a factor.
Yeah, it's unfortunate that they take into account the utilization. You would think the credit analyst would be able to see that the card has had payments in full every month, no lates, and is an AU, and would take that into consideration. If they take into account the utilization on that card, they should allow for household income for students to be included.
I would disagree. You may have had a negative experience, and the OP may question their risk rationale, but IME (and with over 50K+ in TLs with Citi) - never have had any major issues. But that's the beauty about choices.
Being an authorised user indicates that the person has given you authorisation to use their account, so you share the benefits,or drawbacks in this case of having it. Unless your brother has full access to the income of the household, it isn't the same at all. You culd always have him be removed from the account so that this won't happen again.
@v639dragoon wrote:What alternatives are there?
Have him dropped as an AU.
Have the account's reported utilization lowered by paying the balance down before the statement cuts.
Apply for a different card with another issuer with different critieria.