@Anonymous wrote:
I have been caught up with two different, but yet similar problems based on being an AU to wives...
Scenario 1. 1st wife opened Capital 1 account in 1997. Limit $1,400. Perfect payments until after our divorce. Balance normally 0, then one 30 day late June 2010. We closed the credit card September 2011.
Query: Since the CC is closed, there should no longer be a utilization affect, Correct?
Query: Since the CC is closed, the damage, if any, to longevity of accounts has already occurred, Correct?
Query: Since the 30 day late is relatively old, is there any benefit to my FICO score to have the AU report eliminated to remove the late?
Scenario 2. My new wife added me to her BofA Visa Card in September. 2012. Opened in 1994. Limits, to $100,000, but can only carry a balance to $20,000. The credit limit is reported as 0, so I asked TransUnion to investigate. In doing so, they removed the account from TransUnion. They claim the AU account had no impact on my credit. However their reports say my available credit is limited, and my credit card longevity is too short. I only have two CC cards, both issued in 2004, the first with a $5,000 limit with a 0 balance (but no new reporting dates), and the second has a $3,000 limit with a $ 900 balance. I do have a 2002 Heloc with a $100,000 limit with balance of $53,000.
Query: Should I ask my wife to limit the card to 20k so that it will be reported with an actual credit limit (suggestion of BoA), or leave the AU CC off my credit report, get my name of the AU CC altogether, or do nothing. I can't figure out what to do.... CC accounts (including Heloc) are too new at 8 to 10 years?
Any guidance is appreciated.
#1 The account is going on 16 years old. While util isn't an issue since it is closed and paid, and the late's damage is relatively gone, the only other factor is the age. If the AAoA (Average age of accounts) is 16 years or older, then this account would be younger relatively speaking. I suspect otherwise, right? If your AAoA is younger, then removing it will lower that AAoA and risk a lower score. Also if this account is your oldest overall or oldest revolving account, then you also risk a loss if removed.
#2 FICO will be ignoring the balance and the CL when factoring your score. FICO will ignore HELOCs, LOCs, and CCs above a certain limit. That limit is unknown and varies by FICO version, but it's around half of that. So, if that $20k cap were removed, and all $100k were used, it shouldn't have any FICO impact. That limit is in place because many borrowers took a 2nd on their mortgage in the pre-inflation days and lenders did so via a HELOC which is scored like a CC. So in order for folks not to be penalized for having a 2nd mortgage if created via a HELOC, a cap was placed for scoring purposes.
In your case, even if a CL showed of $100k, FICO would ignore it. FICO will still ignore the CL at $0 anyway and any balance that went along with it. No worries there.
A dispute will most usually remove an AU TL. I disgree with TU's CSR though. Most have no clue on FICO scoring. Now the score they push is a FAKO called a VantageScore and at one point the Vantagescore they offered excluded AUs from scoring. That's no longer the case though. FICO still includes AUs and it could have helped your score if older than your AAoA or among your oldest accounts.
If you have the ability to re-add yourself, I'd suggest it for the history alone.
