08-29-2011 01:05 PM
Hey all, I am new here. I wanted to ask if I am getting the most of my types of CL's.
Installment loan was 15k, now 12k, 3 months old
Amex - 8900 out of 9200 (I am no longer on this card, was authorized user)
Visa - 2k out of 15k
Visa - 700 out of 2.5k
I want to know if removing myself from the Amex would make a huge difference in my score?
08-29-2011 01:33 PM - edited 08-29-2011 01:34 PM
When deciding whether or not to become, or remain, an AU on a card - consider the following:
The age of the card - if it is older than your oldest card; or older than your AAofA it could be beneficial.
The history of the card - if it has any lates, they could damage your credit
The utilization on the card - if it has a high utilization, it could cause damage your credit.
In this case, the utilization on the Amex is about 97% which typically causes significant FICO damage.
If you take yourself off as an AU, and you don't like the FICO results, you can always add yourself back on. Or add self back on after the utilization comes back down.
I've gotta add a note on this - DH was an AU on an AmEx and it is taking us months to get it off his reports - we've finally gotten it off TU via dispute, but EQ refuses to budge.
08-29-2011 07:58 PM
Even if the AU gives you a ton of added history, you may get a boost from removing it due to lower utilitization and a possible re-bucketing. If the AU card always has a high balance reporting then it may be doing you more harm than good. If you are in a bucket with lots of people with old credit who pay on time, your 44% utilization may score very poorly. Without the AU card you may be in a younger credit bin where 15% utilization scores relatively well.
If this is a one time thing then it is probably best to keep the card, if the balance has been near this high for a long time I would have it removed.
08-31-2011 07:25 PM
I am speculating here, but since util of credit is a much higher weighting factor in FICO scoring than length of credit history, I would presume that the related bucketing or categorizing of your file prior to running the appropriate algorithm would be more afftected by your high util than your length of credit.
While the exact FICO bucketing determinations are not public, I would presume that some are more major than others.
Additionally, a high balance account probably will have a higher future chance of not meeting the minimum monthly payment than a lower balance account, which might increase the chance of future monthly delinquencies on that account. It appears to be an account of much higer risk potential, and I myself would probably ditch it.
09-30-2011 08:22 PM