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...uh, add my 5yr old as an authorized user?

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Anonymous
Not applicable

Re: ...uh, add my 5yr old as an authorized user?

I would love to have a thicker file.  I don't have any big purchases (home/auto) coming up and my scores are in the 760s, but it would be nice if my AAoA was 6 years instead of 2.5 years...  I'm not worried about manual review, if a profile has a 13 year AAoA with 0 inquiries and a perfect history, the app isn't going into manual review.

 

In the grand scheme of things, it doesn't make much of a difference.  But adding kids as an AU gives them a great head start in credit history when they come of age.

 

To put it in perspective, I was added as an AU in 1996 (6 years old).  That shows on my history and allowed me to get a BoA unsecured card and an Amex.  The rest fell like dominos after that.  If I was added as an AU on a few more cards, my AAoA would be closer to 5-6 years and my FICO would likely be in the 800s range.

 

BUT, without the AU accounts, I'd just now be getting a BoA card unsecured.  I'd probably have an open Discover card with ~$1000 trade line and only a couple of accounts.  Equally important, I'd have missed out on ~$500 in sign up bonuses.  To each his own, but when I have kids they're going to be AUs on my cards ASAP.


@bonehead88 wrote:

This will help with computer applications but any manual review would immediately ignore it.

 

The credit reports already had a "file indicates credit may have been established prior to age 18" statement on it when I had my parents' AU card removed a couple years back. It wouldn't be tough for an underwriter to spot even without the statement and almost all I talked to said they ignored the account when I called in.

 

There's no saying how things will be in 13 years but with all things following the trend of being more detailed and loopholes always closing, I would be surprised if there was any benefit to an AU account from age 5 in 13 years with even computer apps as I believe the systems will catch up. There's already little benefit when talking to a person.

 

I'd also question the true gain of doing this. Unless your son will need a great credit history at 18-21 for independent purchases, the difference from adding him as an AU at 15 or 18 or something more appropriate will be negligible by the time he's 23-24. I started around 18 and was in excellent shape by 25.


 

Message 31 of 41
Anonymous
Not applicable

Re: ...uh, add my 5yr old as an authorized user?


@newhis wrote:

With all the changes with Amex (no backdating), Discover (CLIs every 16 days), Chase (denials for getting 4 cards in 2 years), we shouldn't worry about giving AUs to kids to build history. Imagine all the changes to credit history/scoring that will happen in 5, 10, 15 years.

 

I'm learning the rules on this 'credit game' in the USA. For me it is weird that you can add someone as AU and the open date will show the same as the main cardholder, and all their payment is reported even if the AU doesn't use/pay the card. I mean, is great to boost someones credit but it is weird that this happens.

 

My DW and I, were able to build credit in USA from no score to have over 740 ficos in less than a year, starting with a secured card and a regular card. I believe we only need an auto loan or mortgage and a few years of credit history to be 800. So really, what is the point of having credit history before being 18 years old?


I'm fairly certain that CCCs do not backdate AU cards.  The date you are added is the date it begins reporting if I'm not mistaken.

Message 32 of 41
Anonymous
Not applicable

Re: ...uh, add my 5yr old as an authorized user?


@Closingracer99 wrote:

@Anonymous wrote:

YES!  Absolutely add your son as an AU for your cards.  Add him to as many cards as you can.  When he's eligible to be added to more cards, add him to those cards as well.

 

By the time he turns 18, his AAoA will be better than most 25 year olds.  If he gets into credit cards as a hobby, he'll already have an established credit profile and will be able to add multiple cards without damaging his AAoA.

 

My father added me as an AU when I was 6, again at 22.  Those two cards are the sole reasons I'm able to have such a great line of cards at my disposal.  You'll be helping him along TREMENDOUSLY, and if he's responsible with his credit he'll thank you for it.


Eh for chase their AAOA would be zero years anyways 


Only one of the big players sees this issue.  Their AAoA for Amex, BoA, Citi, Discover, and Barclay will all reflect the AU card...

Message 33 of 41
newhis
Valued Contributor

Re: ...uh, add my 5yr old as an authorized user?


@Anonymous wrote:

@newhis wrote:

....

 

I'm learning the rules on this 'credit game' in the USA. For me it is weird that you can add someone as AU and the open date will show the same as the main cardholder, and all their payment is reported even if the AU doesn't use/pay the card. I mean, is great to boost someones credit but it is weird that this happens.

 

...


I'm fairly certain that CCCs do not backdate AU cards.  The date you are added is the date it begins reporting if I'm not mistaken.


Nixon say that Discover backdates AUs with all the payment:

http://ficoforums.myfico.com/t5/Credit-Cards/Question-about-AU-backdating/m-p/3922712/highlight/true#M1096324

 

TheGardner say some issuers do it, but not Amex:

http://ficoforums.myfico.com/t5/Credit-Cards/Question-about-AU-backdating/m-p/3922750/highlight/true#M1096346

 

ksantangelo23 share some personal experience about AU backdating:

http://ficoforums.myfico.com/t5/Credit-Cards/Question-about-AU-backdating/m-p/3922796/highlight/true#M1096366

Message 34 of 41
amakol
Regular Contributor

Re: ...uh, add my 5yr old as an authorized user?


@Anonymous wrote:

I would love to have a thicker file.  I don't have any big purchases (home/auto) coming up and my scores are in the 760s, but it would be nice if my AAoA was 6 years instead of 2.5 years...  I'm not worried about manual review, if a profile has a 13 year AAoA with 0 inquiries and a perfect history, the app isn't going into manual review.

 

In the grand scheme of things, it doesn't make much of a difference.  But adding kids as an AU gives them a great head start in credit history when they come of age.

 

To put it in perspective, I was added as an AU in 1996 (6 years old).  That shows on my history and allowed me to get a BoA unsecured card and an Amex.  The rest fell like dominos after that.  If I was added as an AU on a few more cards, my AAoA would be closer to 5-6 years and my FICO would likely be in the 800s range.

 

BUT, without the AU accounts, I'd just now be getting a BoA card unsecured.  I'd probably have an open Discover card with ~$1000 trade line and only a couple of accounts.  Equally important, I'd have missed out on ~$500 in sign up bonuses.  To each his own, but when I have kids they're going to be AUs on my cards ASAP.

 


Right, but what's the benefit fo a FICO score in the 760s vs. 800s, especially for either a kid in their early 20s or someone like you who does not need the FICO for auto/home loans coming up? Even with mortgages, 760+ typically represents the highest bracket. Outside of pride, sense of accomplishment or peace of mind, there's not an actual practical gain to a higher FICO.

 

My point was not on AU accounts in general but the timing. Both me and my sister were AUs on just one of our parents CC's starting when we were both around 19-20, and her FICO is currently a 787 via Discover TU at the age of 23 while my scores are below. These include Chase, Amex, Citi, DC, BoA, anything. The advantage of getting the first unsecured card with an AU on computer file is a strong one for now to get around the system, but will still be there when the OP's child is older. That is, unless bank algorithms catch up and remove this perk in which case it wouldn't make a difference now or later either way.

EQ 740 FICO, 4 INQ | EX 736 FICO, 5 INQ | TU 745 FICO, 5 INQ | CL $175K | AAOA 4 Years
Message 35 of 41
Anonymous
Not applicable

Re: ...uh, add my 5yr old as an authorized user?

I wouldn't have my cards if it weren't for my wife adding me as an AU on her $15k limit 8 year old card.

Chase didn't count it, Discover counted it very little. Cap1 and AmEx seem to have counted it like it was mine.
Message 36 of 41
newhis
Valued Contributor

Re: ...uh, add my 5yr old as an authorized user?


@Anonymous wrote:
I wouldn't have my cards if it weren't for my wife adding me as an AU on her $15k limit 8 year old card.

Chase didn't count it, Discover counted it very little. Cap1 and AmEx seem to have counted it like it was mine.

Good info, thanks.

Message 37 of 41
alovingmommyof3
Valued Member

Re: ...uh, add my 5yr old as an authorized user?

I am torn about this issue.  My teens were added to a card in maybe 2011.  My oldest was about 15, and my other two were 13 and 11.  My oldest is now 18 with an almost 800 score.  She was told by Discover she couldn't get a regular card without a cosigner.  She was able to get a student card with a $1000 limit.  She has been told about how credit can ruin her life.  I've used my experience of having my credit trashed and rebuilt to a 780 score as a insturctional tool.  Right now she is learning about inquiry's and how having too many is bad.  If my other two overhear these conversations, they will learn by proxy.  When it is their turn to really learn, it will be easier to teach them.  My daughter actually said she didn't want $1000 limit because she doesn't feel comfortable being trusted with that much.  I told her we could request to reduce it.  She declined - maybe because she was getting overwhelmed with her credit lessons.

 

The reason I am torn is because I have fallen on hard times in the past and had my credit trashed.  However, I learned from from those hard times.  Recently I suffered a job loss, but refuse to use my credit cards to help me until the need is so dire there is no other way.  I saved as much as I could before the loss. If it comes down to having to use the cards to survive, I will remove my teens as authorized users. 

Message 38 of 41
vanillabean
Valued Contributor

Re: ...uh, add my 5yr old as an authorized user?


@alovingmommyof3 wrote:

 

My oldest is now 18 with an almost 800 score.  She was told by Discover she couldn't get a regular card without a cosigner.  She was able to get a student card with a $1000 limit.


 

Hello there, alovingmommyof3. Congratulations on your various family finance escapades! Would that be a FICO 08 or 04 score by any chance and how close is "almost"? Does your oldest daughter have other cards of her own?

 

Message 39 of 41
alovingmommyof3
Valued Member

Re: ...uh, add my 5yr old as an authorized user?

I don't think her score is a FICO score.  We got it from those free credit monitoring sites.  She will find out her FICO score sometime after she gets her discover card since they provide it for free.

 

The only other card she has is an Amazon Store Card.  She could probably apply for others, but her history is a bit limited because she only has the cards I authorized her on which isn't all the cards I have.  However she doesn't want to try for more until she gets comfortable and we don't want her to have too many inquiry's which brings me to her next lesson which is credit utilization.

 

On another note, I added a friend to a few cards.  In maybe 6 months their score went up 100 points.  They had a very low score to start.

Message 40 of 41
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