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To AU or not to AU

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Anonymous
Not applicable

To AU or not to AU

My husband has a 10 year old CC with a several thousand dollar limit, no lates and very little usage. We use it as the emergency/large purchase card. 

 

Would it be beneficial to my credit to be added as an AU or would this invariably backfire when we eventually go for a home loan? Also, his credit recently took a major dive - I've read that AUs don't get their credit linked, but wanted to double-check here that it wouldn't harm mine.

Message 1 of 5
4 REPLIES 4
gdale6
Moderator Emeritus

Re: To AU or not to AU


@Anonymous wrote:

My husband has a 10 year old CC with a several thousand dollar limit, no lates and very little usage. We use it as the emergency/large purchase card. 

 

Would it be beneficial to my credit to be added as an AU or would this invariably backfire when we eventually go for a home loan? Also, his credit recently took a major dive - I've read that AUs don't get their credit linked, but wanted to double-check here that it wouldn't harm mine.


Mortgage lenders wont use AU accounts to figure out your score. If there is a need to add for another reason then you might do so but only if its reporting a 0 balance. You will inherit the account history as long as you are an AU so if there are derogs on it its a non starter.

Message 2 of 5
RobertEG
Legendary Contributor

Re: To AU or not to AU

Whenever you are an AU, the reporting of the credit history of the account of another to your CR makes your resulting credit score non-representative of only your own history.  A prospective creditor has no way to "back out" the effect of that account on your score, and thus they may discount the value of the score in their decision making.  Some mortgage lendors will require you remove the AU, enabling them to get a "real" score.

 

AUs are great when the propspecitive creditor does not go beyond simple use of your score, as with many low principal credit approvals.

However, if they do a manual review and see an AU, it can create problems.

 

 

Message 3 of 5
Anonymous
Not applicable

Re: To AU or not to AU

I may know about another option, but if you don't, will throw it out for your consideration.

 

Have your Husband add you on as a Joint Account Holder instead of an AU. Now people will warn you as well as myself, that you are a responsible party for debts incurred on the the card. It is bacially making his card, your card too. So if things go south with your relationship or your hubby runs up the bill and doesn't pay, it will cause problems with your credit worthiness that you are unlikely to correct. Unlike a AU, where if the account holder doesn't pay and has 30 or more days late, you can get that AU tradeline removed rather easily.

 

On the good side. The joint account will count toward your credit score both FICO scoring and under manual review. They can't discount it.

 

It's a decision you need to ponder.

 

Also, I would call the card issuer up if going either route. Some lenders will report AU as new account, Amex comes to mind. Some card issuers will not do AU's but will do joint. I would verify both options before you pull the trigger.

Message 4 of 5
Anonymous
Not applicable

Re: To AU or not to AU

Yes, Yes Slim Shady good point. I was just about to mention the joint user. If it's capital one, they won't let you add a joint user. Discover weill let you easily, they will send a packet in the mail 5-7 days you guys fill it out and mail it back. AMX (compass bank) told my boyfriend he would have to just pay it off and then apply for a new card thereby ruining the point of gaining all that history.

 

So in my opinion if the joint user doesn't work out then AU can't hurt. The new vantage 3.0 score doesn't even count authorized users AT ALL which sucks but since it ignores collections completely (paid) I think it's a fair trade off. Keep us posted!

Message 5 of 5
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