09-26-2011 02:25 PM
Will adding my son as a joint account holder hurt his credit in this situation ? He has no credit history and has been an authorized user on my chase credit card for a month now chase will add him as an account holder but I need to know what my balance should be before I add him so I don't ruin his credit . He is 20 now. All payments are on time for 3 years 100%
09-26-2011 05:31 PM
Amount owed or utilization accounts for 30% of a FICO score, ideal balance is about 9% of the credit limit.
9% of 6000 CL is $540. So 50% balance of 6k, would be hurting his score alot.
I would suggest to pay down the balance and if that is not possible, take him off as an AU.
Also suggest for him to get a secure CC that reports to the CRA's.
Does he have a bank that he uses? If not, see if he would join a CU.
IME, most of them have free seminars,workshops and free financial counseling.
With your son being 20yrs old, a CU is an ideal place for him. I have a 32yr old son, he tends to listen to people his own age, then to listen to me.The problem with that is.........All his friends are broke. Kids don't want their parents to know all about their finances, especially the mistakes. So I believe if you can steer him into a direction of a CU, he will thank you in the long run.