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[mrgoattoo]

I have three step children from a previous marriage and the daughter from that marriage and her husband are looking to buy a house.

Their credit is so-so and I was thinking of just adding them both as AU's to a low CL credit card to see if it might help boost their FICO a few points and maybe save them some interest.

I will not be allowing them to charge anything...they wont be getting a physical card at all, and the limit on the card Im using for this has been lowered to $500 because I use it for online purchases only, so the liability risk here is pretty much zero. They will just be being added as AU's so it may help boost their score a little.

Q: Am I correct in assuming that any AU on a card can in no way affect your credit score (assuming the CC you put them on is always paid on time) ?

Q: I had heard there were some changes to the AU rules and that its possible that this wont help their score at all since they arent immediately related anymore due to my divorce from my step daughters mother, is this accurate or will it help their FICO to be an AU on my CC since its a well established card that Ive been making payments on for years?

I have more questions but I'd like these figured out first because if these dont fly then there isnt much reason to proceed.

Thanks in advance.

[pizzadude]

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@mrgoattoo wrote:

I have three step children from a previous marriage and the daughter from that marriage and her husband are looking to buy a house.

Their credit is so-so and I was thinking of just adding them both as AU's to a low CL credit card to see if it might help boost their FICO a few points and maybe save them some interest.

I will not be allowing them to charge anything...they wont be getting a physical card at all, and the limit on the card Im using for this has been lowered to $500 because I use it for online purchases only, so the liability risk here is pretty much zero. They will just be being added as AU's so it may help boost their score a little.

Q: Am I correct in assuming that any AU on a card can in no way affect your credit score (assuming the CC you put them on is always paid on time) ?

Q: I had heard there were some changes to the AU rules and that its possible that this wont help their score at all since they arent immediately related anymore due to my divorce from my step daughters mother, is this accurate or will it help their FICO to be an AU on my CC since its a well established card that Ive been making payments on for years?

I have more questions but I'd like these figured out first because if these dont fly then there isnt much reason to proceed.

Thanks in advance.

---

You're correct that adding an AU to one of your accounts will not affect your FICO score.  On older FICO score models ( FICO04 and earlier ) the AU's FICO score will take the account into consideration.   Newer FICO score models ( FICO08 and newer ) don't factor in AU accounts in many situations.

[mrgoattoo]

You're correct that adding an AU to one of your accounts will not affect your FICO score.  On older FICO score models ( FICO04 and earlier ) the AU's FICO score will take the account into consideration.   Newer FICO score models ( FICO08 and newer ) don't factor in AU accounts in many situations.

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I see...thanks for the info.

So it may or may not help them out depending on what FICO model is used, if Im understanding you correctly.

[pizzadude]

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@mrgoattoo wrote:

You're correct that adding an AU to one of your accounts will not affect your FICO score.  On older FICO score models ( FICO04 and earlier ) the AU's FICO score will take the account into consideration.   Newer FICO score models ( FICO08 and newer ) don't factor in AU accounts in many situations.

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I see...thanks for the info.

So it may or may not help them out depending on what FICO model is used, if Im understanding you correctly.

---

Yep that's correct from a FICO score perspective.  Underwriting algorithms are able to weed out AU accounts as well.

[mrgoattoo]

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@pizzadude wrote:

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@mrgoattoo wrote:

You're correct that adding an AU to one of your accounts will not affect your FICO score.  On older FICO score models ( FICO04 and earlier ) the AU's FICO score will take the account into consideration.   Newer FICO score models ( FICO08 and newer ) don't factor in AU accounts in many situations.

---

I see...thanks for the info.

So it may or may not help them out depending on what FICO model is used, if Im understanding you correctly.

---

Yep that's correct from a FICO score perspective.  Underwriting algorithms are able to weed out AU accounts as well.

---

Ok.

Thanks for the help.

I'll let them know that we can give it a shot but it may not make any difference.

Seems like a few FICO points can really make the difference in gettting a mortgage payment you can afford...and one you cant.

[pizzadude]

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@mrgoattoo wrote:

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@pizzadude wrote:

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@mrgoattoo wrote:

You're correct that adding an AU to one of your accounts will not affect your FICO score.  On older FICO score models ( FICO04 and earlier ) the AU's FICO score will take the account into consideration.   Newer FICO score models ( FICO08 and newer ) don't factor in AU accounts in many situations.

---

I see...thanks for the info.

So it may or may not help them out depending on what FICO model is used, if Im understanding you correctly.

---

Yep that's correct from a FICO score perspective.  Underwriting algorithms are able to weed out AU accounts as well.

---

Ok.

Thanks for the help.

I'll let them know that we can give it a shot but it may not make any difference.

Seems like a few FICO points can really make the difference in gettting a mortgage payment you can afford...and one you cant.

---

With mortgages it's true that a few points can make a difference due to the firm FICO score cutoffs.  Be aware that the mortgage industry is standardised on the FICO04 score model which does factor in AU accounts.

[mrgoattoo]

"Be aware that the mortgage industry is standardised on the FICO04 score model which does factor in AU accounts."

Great. Hopefully it stays that way long enough for them to get a decent interest rate if it gets them into the next FICO bracket.

[TheGardner]

How old is the account? Will it report as the open date or the date you added them? This may help even with a new date IF they have no credit cards. Otherwise the AAoA may hurt the scores with a thin file. The low limit will likely have no effect on DTI or UTL so that's a good and a bad for this purpose. As stated above luckily mortgages are using 04 model.

Good luck to them!

[vanillabean]

If you have a credit card debt of $20,000, FICO 04 can lower the utilization and increase the score by way of AU, but you still owe $20,000. Being AU also won’t remove baddies or anything else, except maybe also increase the AAoA. An underwriter can overwrite FICO on rates, I would imagine (but don’t know). Given your own scores, I can only assume you know exactly the needed advice to give your daughter and her husband on how to fine-tune their credit; there may be some potential there? Good luck!