complex question - divorce, authorized user, etc.

[txblack73]

Hello All,

I'm new here, but have been reading a bit on the boards.  I have a few questions to which I'm hoping for some wise input on.  

I have had terrible credit problems in the past due to my own irresponsibility.  However, for the last 2.5 years, my payment history is absolutly perfect.  I have one Chase Sapphire preferred card (5k CL) in my name only and payment history has been good, but utilization has been high.  I have recently paid it down to 20% util.  I have 3 other cards: citicard mc (9k), amex (10k), and discover (14.5k) on which I am an authorized user.  History on these 3 cards is lengthy at 20 years, so these are helpful and they've all been paid in full.  I am almost divorced and to be fair, I have asked her to remove me as an authorized user.  Last, another account from a rural bank for a land purchase is on my report.  It is reporting as revolving credit account and has been paid on time since inception.  This account has been paid in full as we've sold the land.  So, all in all, 5 revolving accounts all with a perfect payment history.  I have 4 installment accounts which are also clean and paid on time.  Summary: Very clean for the last 2.5 - 3 years with recent high utilization, but have been PIF except for the Chase Sapphire which is at 20% util.

I have 10-12 old accounts which ended up in collections each of which I paid less than full amount for a settlement.  These were paid about 3 years ago and is about the time, I took paying my bills seriously.

So, my questions are:

1. What will the removal of me as an authorized user on these high balance revolving credit accounts do to my score?

2.  If this is a negative impact, is there anything that I should do to expedite the raising of my score other than waiting for time to pass?

3. Besides the obvious of not paying my bills, is there anything I should NOT do at this point so as not to jeopardize my score being raised?

FYI - I omitted my scores which are: EQ:627 ; TU:635 ; EX:645.

Most of the reason for the lower scores (in my limited knowledge) are:

1. high utilization on credit cards which have been paid in full as of last month.

2. Older negative accounts.

Thanks all for your input.

[CreditDunce]

I can take a shot at it.  Hopefully, someone else with more experience can chime in, too.

Being removed as an AU will hurt your FICO 04 scores.  This may make it difficult to qualify for a mortgage depending on how much it drops your score.

FICO 08 is used for most CC apps.  In FICO 08, the AU accounts are discounted.  It will probably hurt some, but it may not hurt that much.

If you only have one open revolving account, you will probably want to open a second credit card.  Only having one open revolving account will hurt your score.  At least three is optimal for FICO scoring.   Please, note opening new accounts may lower your score in the short term, but it should rebound in 6 months.  In 6-12 months you can add a third or fourth credit card, if desired.

Since you have a good relationship with Chase, I would consider something like the Slate or Freedom.  You may want to pay down your balance before applying.  If Chase is unwilling to extend you more credit, Cap1 will probably approve you.  Other options would be the shopping card trick or a secured credit card.  

Secondly, you can open a shared secured installment loan.  It will cost a little bit in interest, but should help your score overtime.   Having an open installment loan is a minor plus.  With your closed installment loans it will not help that much.  But it could make a difference in a couple of years if you apply for a mortgage, etc.

At some point, you may hit a credit score limit due to your baddies.  However, as they drop off, your score should increase.  It will likely take time to make a large improvement on your credit score.

Good Luck

[txblack73]

Thanks much for the suggestions and information.