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How an AU card helps someone

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red259
Super Contributor

How an AU card helps someone

I have a relative who went through a bankruptcy 9 years ago. They never obtained any credit cards after. I believe their credit history is pretty bare at this poiint and they have limited income. They need to apply for a loan for something that is essential that health insurance will not cover. If I added them as an AU to one of my cards what impact would that have for them? Does all my credit history on my card automatically report to their credit report? So if I have a card that is three years old do they get three years of history on their report? 

;
Starting Score: EQ: 714, TU 684
Current Score: EQ: 725 7/30/13, TU 684 6/2013, Exp 828 5/2018, Last App 8/5/17
Goal Score: 800 (Achieved!) In garden until Sepetember 2019
Message 1 of 7
6 REPLIES 6
ddemari
Super Contributor

Re: How an AU card helps someone

From what I have read, there are any variables that can go into how a lender looks at an auto user. According to an Article from discover," According to a poll conducted by Nerdwallet[2], two major U.S. credit card issuers do not report authorized users’ activity at all, three issuers report to all three bureaus, one issuer reports only positive information, and two issuers—including Discover—report authorized users’ activity differently from that of the account holder. So make sure that being added to someone’s account actually does something to build your credit"(discover.com).

 

ive also read that Chae doesn't put much weight on auto user accounts when thinking of approval.do you think they could apply for one of the financing cards through synchrony or comenity? Depending on how quick they need these funds, even if the autho user thing could help,them it might take a little to get updated on reports. Synchrony care credit could be a possility. 

 

 

Message 2 of 7
RonM21
Valued Contributor

Re: How an AU card helps someone

Nice pull from Nerd Wallet. So, depending on the card you make her an AU on, it may or may not help them.

Beyond this, if your relative would like to start building credit, I'd recommend getting a Cap1 secured card to get things moving.


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Message 3 of 7
red259
Super Contributor

Re: How an AU card helps someone


@RM21 wrote:
Nice pull from Nerd Wallet. So, depending on the card you make her an AU on, it may or may not help them.

Beyond this, if your relative would like to start building credit, I'd recommend getting a Cap1 secured card to get things moving.

Yea, I am trying to help them skip the secured card step if possible and really the goal here is to just generate credit history for purposes of obtaining a loan. Not really looking to build up a card collection. 

;
Starting Score: EQ: 714, TU 684
Current Score: EQ: 725 7/30/13, TU 684 6/2013, Exp 828 5/2018, Last App 8/5/17
Goal Score: 800 (Achieved!) In garden until Sepetember 2019
Message 4 of 7
Anonymous
Not applicable

Re: How an AU card helps someone

To answer part of your original question, no, your relative would not automatically inherit three years of payment history on the card.

Their reporting would begin with the day they become authorized and continue from there, depending on the reporting habits of the lender in question, as mentioned in the earlier post.  The Age of Account could show the original account's age, but the payment history prior to becoming authorized user would not be on the report - it'd be "blank" until the first cycle where the authorization took effect.

 

If this is the sole thing in the person's file, then it is probably not going to be sufficient to raise a score/profile to the point of being able to get a loan on good terms any time soon.  Your relative needs more than this one authorized user account, and needs time with any and all accounts in their file to significantly raise a score or set up enough of a profile.

 

Care Credit, as mentioned before, may be an option for upcoming medical expenses, as their underwriting is a bit more lenient than other lenders.  

I know you said that a collection of cards is not the goal, but it is the strange reality of credit that it is harder to get when you don't have any than it is when you have several lines already.  Not that your relative should run out and open five sub-prime cards... just that building a profile in order to be able to get a personal loan on good terms (as opposed to a payday/short term loan with monstrous interest) requires more than one open account and time to age those accounts.

Message 5 of 7
Anonymous
Not applicable

Re: How an AU card helps someone


@Anonymous wrote:

 

If this is the sole thing in the person's file, then it is probably not going to be sufficient to raise a score/profile to the point of being able to get a loan on good terms any time soon.  Your relative needs more than this one authorized user account, and needs time with any and all accounts in their file to significantly raise a score or set up enough of a profile.

 

 

I know you said that a collection of cards is not the goal, but it is the strange reality of credit that it is harder to get when you don't have any than it is when you have several lines already.  Not that your relative should run out and open five sub-prime cards... just that building a profile in order to be able to get a personal loan on good terms (as opposed to a payday/short term loan with monstrous interest) requires more than one open account and time to age those accounts.


+1

 

The above is a great post......

 

 

We've got to be FAIR in our expectations, if it were THAT simple why wouldn't folks just 'piggy-back' for ANY credit or loan they 'wish' to have.

The a/u thing can be blessing in that it allows some 'cheating' or skipping the line to happen but c'mon...that's like using your cousin's report card to enter medicl school...not gonna happen.

 

 

The A/U account will likely help the relative get a CC, especially one that auto approves, which could be step one towards getting a loan like the one needed.

 

Hopefully, she doesn't need an emergency medical procedure and can take some time to build up a history strong enough for her needs.

 

 

Message 6 of 7
RobertEG
Legendary Contributor

Re: How an AU card helps someone

If you have an added AU that is, in fact, included in your scoring, that automatically means your score is no longer an analysis of your own history.

If a prospective creditor does a more thorough manual review, of which chances are higher if you app for a loan of significant principal amount, they will be aware that the score they are receiving is not representative of only your own credit history.

 

They might choose to discount the consideration of your score in their lending determination.

Some mortgage lendors have been known to request removal of AU accounts as part of their normal underwriting.

Message 7 of 7
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