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Herakles54
Posts: 3
Registered: ‎05-17-2009
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Question re: Authorized User

I've been an authorized user on my parents' credit card since '05 (date of account open), but I never use the card.  Recently, they've incurred some expenses and the balance is quite high compared to the limit (18k bal / 23k limit).  I have several credit cards of my own with relatively low balances and low credit limits ($1500 bal total / $7500 limit), though they've only been open for about 2 years, as well as around 14,000 in student loan debt.  I've never missed a payment on anything, ever, and my credit score is 703 (TransUnion and Equifax)

 

My question is: If I am removed as an authorized user on my parent's credit card, will the account still show up on my credit report?  If so, would the ensuing reduction to my overall 'debt' (even though it's not really mine) compared to the total amount of credit (the extra 23k limit) be worth it compared to the benefit of the perfect payment history on the card for the last 4 years?

 

If you need more info to answer the question(s), please post and I'll provide what I can.  Thanks.

Senior Contributor
smallfry
Posts: 4,831
Registered: ‎04-20-2007
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Re: Question re: Authorized User

YMMV. I have seen it disappear on some reports and remain on others. If you are removed even if it stays on a report it will show as closed and not be a problem for your overall utilization. 
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Epic Contributor
haulingthescoreup
Posts: 28,115
Registered: ‎04-01-2007

Re: Question re: Authorized User

[ Edited ]
Hi, welcome to the forums.

The answer is: it depends. (Don't you love that?)

Do you know what your FICO scores (pulled here, not from credit monitoring services, etc.) were back when the balance on the AU card was low? If it was higher then, but 703 now, that's an indication that it's probably hurting.

Util without the AU card:

$1,500 / $7,500 = 20%

Util with the AU card:

$19,500 / $30,500 = 65%

65% util is awfully high --20% is higher than it should be, too --so I'd say that right now, it's hurting, despite how much it helps your age.

Calculate your AAoA (average age of accounts) in years and months on your own cards and your SL, plus anything else, open or closed, on your reports beside the AU card. To do so, start with the opening month and date and figure how many months have gone by from then until now. Add up all the months, divide by the number of accounts, and turn it into yy/mm. If you're already over 1 year, that's a plus.

My guess is that the AU card has done its job, helping you to get started, and it's time to let it go.

Since you posted TU and EQ scores, and not EX, I'm assuming that these are FICO scores, which is good. Check the positives and negatives on screen two of each myFICO score report. They're listed in descending order of their importance to your scores. Probably "short history" is at the top, but I'll bet that high utilization is up there, too. Only the passage of time will fix the short history thing, but you can fix the util issue.

You should also get your own util down to 9% or less. Most of us have the best results when only one card reports a balance, and the others report $0. Use the cards, but pay them off online before their statement date, which is the figure that most CCC's report to the CRA's/

If you haven't already, please read Understanding Your FICO ® Score and Credit Scoring 101 (at least the first post.)

These will give you the background knowledge you need to understand what you read here on the forums.


eta: +1 for smallfry --brief and to the point! :smileyvery-happy:
Message Edited by haulingthescoreup on 05-17-2009 07:22 AM
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
New Member
Herakles54
Posts: 3
Registered: ‎05-17-2009
0

Re: Question re: Authorized User

[ Edited ]

Thanks for the info.  I had a feeling that it was time to get my name off of my parent's card.  My AAoA on my cards/SL is just over 2 years (without my parents card).

 

As for my credit score, yes, it's a 703 FICO score.  As for the positives/negatives, the number 1 item is "high credit usage", followed by "number of accounts with balances" and then "short history".  So I guess judging by that, bringing down my util by getting my name off of the AU card should be more beneficial than whatever positive I'm getting from the payment history of the AU card.

 

I will work on bringing down my util to around 9% as you suggested, though this will certainly take time as I'm currently planning my wedding (everything is so expensive!).

 

I also just realized that my student loans are showing up as 5 separate accounts on my credit report, even though I only pay one payment on all of the accounts each month.  I guess technically it was 5 separate loans (2 my first year of college and 1 each of the other 3 years), but it's just kind of frustrating that it's showing up as 5 separate accounts.  Perhaps I need to contact my student loan lender and ask about consolidating, though they are federal student loans and I know I won't be able to get better interest rates (already at like 3.9%).  Thoughts?

 

Oh, and @Hauling, you may want to add this link to your signature: www.ftc.gov/moneymatters . It's the newly revamped FTC advice site for consumers (I work for the FTC investigating mortgage fraud :smileywink:

Message Edited by Herakles54 on 05-17-2009 07:44 AM
Moderator Emerita
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haulingthescoreup
Posts: 28,115
Registered: ‎04-01-2007
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Re: Question re: Authorized User

If you're already over 2 years in AAoA without the AU card, I think you're going to be fine after you drop it.

As regards the SL's, that is one of the maddening things about them, where you have one for every semester. That does impact you somewhat in that you're always going to have 5 accounts reporting balances; thus, the "number of accounts with balances" ding.

But if you have a better deal financially with the current set-up, I don't think you'd want to sacrifice that to please the FICO gods. Financial common sense should trump scoring common sense, unless perhaps you have a major app coming up (mortgage, etc.) where a better FICO score would result in a better financial deal.

But for now, since high util is your first-listed ding, that indicates that dumping the card will be a big help.

Congrats and best wishes on the upcoming wedding!
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
New Member
Herakles54
Posts: 3
Registered: ‎05-17-2009
0

Re: Question re: Authorized User

I have something of a large application coming up: law school loans.  I'm trying to increase my credit score as much as I can in the next year so that I can get the best rates on whatever private loans I have to take out.  I may just have to grin and bear it re: the student loan accounts, but it still can't hurt to give my lender a call.

 

Thanks again for your help!


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