Preparing for FICO 2008: which CCC's will or won't let AU's convert to joint users?

[haulingthescoreup]

Well, who knows when (or if!) FICO 2008 will kick in, suddenly removing a lot of credit history from current AU's (authorized users)? I figured it might be time to start a thread on which CCC's will and will NOT allow the AU's to switch to joint. I put it on General Credit Issues instead of Credit Cards, because it feels like a more "credit-y" issue to me, but mods, please feel free to move it if you think it best.

Just to summarize, there will still be AU status, so others can have a card with their name on it that they can use, and I think (?) it might even be reported on a credit report. But these accounts will be ignored in figuring your FICO scores.

My personal opinion is that it's probably smartest not to use joint accounts at all --there are too many sad surprises in credit and marriage these days, and it's an awful risk to allow your credit to be vulnerable to someone else's actions. You will be stuck with paying off the card if the other person runs it up and takes off. So if losing an AU account doesn't appreciably change a credit report, you might want to just let it go.

Being an AU on an account doesn't automatically mean that you will be hurt if it stops reporting. The things to look for are: (1) what does it do to your overall and average credit history, and (2) how much will your total amount of credit be reduced? (this can greatly affect your util.) In my case, losing my AU card will mean that my total length of credit history will drop from 18 years to 12, and average will drop from 4 years to 3. My total available credit will drop $14.4K, but I have a lot in my own name, and my util is 1%, so it won't have an immediate effect, but it's potentially out there.

There are also supposed to be new score buckets being created, and I suspect that it's for this very reason: to allow "de-AU'd" consumers to retain decent scores. I've decided to hold off switching my one AU card to joint until we see what's what.

Edit: It looks like I was wrong on the new buckets! From what I understand, there won't be any buckets created to rescue AU's who lost all their history.

But if you are comfortable with joint status, and your scores and history really do wind up getting hurt, it would be useful to know your options, IMHO. So here are the 2 things I know about !

Discover will allow conversion from AU to joint status, and the CSR told me that they do NOT pull scores on the person converting. The idea is that if the original card-holder is comfortable with it, that's all they need. After all, if the new person is a complete credit disaster and screws everything up, they can still come after the original. (Remember? --that's the dangerous thing about joint.)

American Express will NOT allow AU's to convert to joint, because they don't have joint status, period, from what I understand. I'm not yet in the "AmEx mafia", so please chime in with more info if you've got it.

I would think that this decision will be made by lender, rather than by card type, in most cases. Has anyone heard from Citi, Chase, a particular credit union, etc. whether they allow AU's to switch to joint, and what's involved?

Message Edited by haulingthescoreup on 03-08-2008 03:43 PM

[demi]

Out of curiousity, since in am in the process of buying a home that is yet to be built....assuming I am approved under the current scoring models, and by the time I actually close (est spring) the new scoring comes in....is there a chance, all other things in my credit  stable, that it could affect my rates?

[fused]

CITI: No, AU accounts can't covert to joint accounts

Chase: Yes, AU accounts can convert to joint accounts. Expect a hard pull for the AU who is apping for joint and not the original primary card holder.

Message Edited by fused on 11-22-2007 08:15 AM

[MidnightVoice]

My Local Credit union - will convert with no pulls. 

[haulingthescoreup]

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@demi wrote:

Out of curiousity, since in am in the process of buying a home that is yet to be built....assuming I am approved under the current scoring models, and by the time I actually close (est spring) the new scoring comes in....is there a chance, all other things in my credit stable, that it could affect my rates?

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What role does your AU account play on your report? Is it the oldest account; gives your total credit a big boost and thus helps lower your util; is clean and the rest is not; has baddies and the rest is clean?

edit: Mortgages aren't purely score-driven, and your lender should be well aware of the new rules, if they've kicked in by then. Also, you might wind up in one of the new buckets that will preserve your scores.

Message Edited by haulingthescoreup on 11-22-2007 05:37 PM

[Anonymous]

I called AMEX this morning to ask about AU.  I was told that I am responsible for charges that I MAKE if the account goes into default (hence the separate account numbers on the cards). 

Message Edited by esshua on 02-06-2008 07:49 PM

[Anonymous]

Is it a Green Card? My mom made me an AU on her American Express account also without my prior knowledge. She rolls some of her balance into a flex account. The rest is paid at the end of the month. The flex account shows as an installment account on my credit reports. There is no reference to the card as a revolving account on my credit reports. I haven't spoken to anyone at AMEX but I sort of assumed that legally, I would not be responsible for my charges (of course I would never default on my mom's card). I didn't know they could hold an AU responsible for charges. I thought that was the risk with adding on an AU. Oh and I have a seperate number too. However, I don't have any inquiries from AMEX.

Here comes my sinister side:

I thought of something concerning someone making you an AU on an account. Is there a way to prove consent. Without consent is it against the law? I could just imagine some ex girlfriend who still might have a person's info (and SS#), adding this guy to an account that is a high util mess and hence lowering his credit score ... right in the middle of buying a home! I wonder if anyone has done this. That would be the ultimate kick in the you-know-whats.

[Anonymous]

It's a Delta Sky Miles Account...

Here are the T&C from the Amex website...  I bolded the juicy stuff...

But what I don't like is that Amex would make a 15 y/o kid an AU.  Do they really think they can hold that kid responsible for anything?  lol...

Terms and Conditions
By entering my name on the application form, I represent that I am a Delta SkyMiles Options Credit cardmember having a Card account with American Express and I ask that an Additional Card (s) be issued on my account to the individual (s) whose name (s) appears "Additional Card Applicant Information" section of the application form. I understand that an Additional Card will not be issued if I have a defaulted account with you or if the Additional Card applicant (s) has ever had a defaulted account with you. I agree to be liable for all charges to any Card (s) issued on my request, including charges incurred with any Additional Card (s) issued on my account now or in the future. The Additional Card applicant(s) is aware that they may be responsible for payment of their own charges if I fail to pay them, and their own credit record may be affected by non-payment of the account.

I represent that the Additional Card applicant (s) is aware that you may verify and exchange information on them, including requesting reports from consumer reporting agencies. If they ask whether or not a consumer report was requested, you will tell them, and if you received a report, you will give them the name and address of the agency that furnished it. If the Card(s) is issued, they have authorized you and your affiliates and subsidiaries to contact these sources for information at any time and to use any information obtained about them for marketing and administrative purposes unless I instruct you otherwise.

Only qualified individuals 15 or over may be approved for the Card.

[Anonymous]

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fused wrote:

CITI: No, AU accounts can't covert to joint accounts

Chase: Yes, AU accounts can convert to joint accounts. Expect a hard pull for the AU who is apping for joint and not the original primary card holder.

Message Edited by fused on 11-22-2007 08:15 AM

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Just want to add re: Chase.

Not only do they pull a hard INQ on the AU who is apping for joint, but a Chase CSR even told me that the AU's CR will determine if the joint status is even allowed, and if it is subpar, it could lead to a change in terms (read AA) on the account, which would affect the existing primary cardholder as well!

Not sure how true that is, as Chase CSRs have given me bad info in the past.

Message Edited by cheddar on 12-31-2007 11:44 AM

[haulingthescoreup]

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@Anonymous wrote:
Just want to add re: Chase.

Not only do they pull a hard INQ on the AU who is apping for joint, but a Chase CSR even told me that the AU's CR will determine if the joint status is even allowed, and if it is subpar, it could lead to a change in terms (read AA) on the account, which would affect the existing primary cardholder as well!

Not sure how true that is, as Chase CSRs have given me bad info in the past.

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Well, geeze, aren't they just the funnest people? Where do they get off taking AA on the original account?

Even if they have suddenly found out that the AU is wobbly in credit terms, the whole definition of the primary cardholder is that s/he is responsible for the card.

BTW, the BofA site says that if someone goes on as AU, that person is responsible for his/ her charges.