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Authorized User Accounts

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HiLine
Blogger

Re: Authorized User Accounts

Revelate, I'm curious about that as well. Amex is the exception to the AU norms, and I wonder how their ACM's are reported. Perhaps asking people on the credit cards board would yield more responses.
Message 11 of 27
Revelate
Moderator Emeritus

Re: Authorized User Accounts


@HiLine wrote:
Revelate, I'm curious about that as well. Amex is the exception to the AU norms, and I wonder how their ACM's are reported. Perhaps asking people on the credit cards board would yield more responses.

Yeah, think will go do that Smiley Happy.




        
Message 12 of 27
bobebob
Frequent Contributor

Re: Authorized User Accounts


@Revelate wrote:

@bobebob wrote:

@CreditBob wrote:

I have gone to a credit seminar & talked to different lenders that I know, and here is what they had to say.

 

Just like the consumer depending on the information & scores being accurate that they are treated fairly, the creditors depend on the information in the same fashion. A good credit rating is based partly on payment history. What does this mean. We'll it means that that individual has applied for credit as the primary account holder and or has been cosigned for because they did not qualify on their own. In other words their credit had to be pulled. In addition to that the primary or cosigner had to demonstrate financially responsibility through their very own actions by making monthly payments.

 

An authorized user account holder does not demonstrate responsibility. There is no way a lender can even determine their level of risk because they make no payments.  And Piggybacking or transferring the information from the account holder, or one that owns the account, has no place on another indiviual's credit profile unless they are a cosigner of the account. In other words they are responsible for payments being made on time. And on a last note, authorized user accounts came out before the fico credit score and where only specifically intended to have access to the funds of the account holder.

 

 


I am an AU on my Mom's AMEX account and I would dissagree with some of the above:

I became an AU not because my credit scores weren't high enough (in signature), but because my mom is the one on the Costco account and AMEX card and for what ever reason, they couldn't make it a joint account.  And guess whose very own actions make sure the bill gets paid every month? Smiley Happy

 

I also asked for and we recieved a significant CLI (from about $5K to $20K) based on my personal credit history, not hers.  I was informed that I personally would be held responsible for any unpaid bills incurred on the card issued in my name.

 

Don't lump all AU's into the same lot.


An Amex AU (ACM in Amexese) is the only exception to the rule.

 

I'd be interested to know how the tradeline reports as it is seperate from the base cardholder's tradeline and they are liable for the charges they incur: does it even list as AU at all?


The tradeline reports as the full $20K credit limit.  And the amount owed always comes up as the total for the account, not just my personal purchases.

 

As it was described to me when I requested the CLI based on my information, I could be held liable for unpaid charges I made on the card issued in my name but not any other charges.

The tradeline reports on my history (under the "Upgraded" version as well) with me as an Authorized User.  It says there that AU's aren't contractually responsible for the debt. 

 

Either AMEX just wanted me to think that I would be liable for my own purchases (when I am not) or the pop-up on the FICO credit report is generic information regarding AU's.

bobebob || Nov: My FICO SW EQ(Upgraded Version) = 822 ||Sept: Walmart TU Fico=838Goal = FICO's>800 || In my wallet: CostcoAmEx(20k), DCU Visa Platinum (10k), BoA Visa Signature (17.1k), Walmart Discover (7.5k), AmEx Corporate (5k). All PIF every month.
Message 13 of 27
Revelate
Moderator Emeritus

Re: Authorized User Accounts


@bobebob wrote:

@Revelate wrote:

@bobebob wrote:

@CreditBob wrote:

I have gone to a credit seminar & talked to different lenders that I know, and here is what they had to say.

 

Just like the consumer depending on the information & scores being accurate that they are treated fairly, the creditors depend on the information in the same fashion. A good credit rating is based partly on payment history. What does this mean. We'll it means that that individual has applied for credit as the primary account holder and or has been cosigned for because they did not qualify on their own. In other words their credit had to be pulled. In addition to that the primary or cosigner had to demonstrate financially responsibility through their very own actions by making monthly payments.

 

An authorized user account holder does not demonstrate responsibility. There is no way a lender can even determine their level of risk because they make no payments.  And Piggybacking or transferring the information from the account holder, or one that owns the account, has no place on another indiviual's credit profile unless they are a cosigner of the account. In other words they are responsible for payments being made on time. And on a last note, authorized user accounts came out before the fico credit score and where only specifically intended to have access to the funds of the account holder.

 

 


I am an AU on my Mom's AMEX account and I would dissagree with some of the above:

I became an AU not because my credit scores weren't high enough (in signature), but because my mom is the one on the Costco account and AMEX card and for what ever reason, they couldn't make it a joint account.  And guess whose very own actions make sure the bill gets paid every month? Smiley Happy

 

I also asked for and we recieved a significant CLI (from about $5K to $20K) based on my personal credit history, not hers.  I was informed that I personally would be held responsible for any unpaid bills incurred on the card issued in my name.

 

Don't lump all AU's into the same lot.


An Amex AU (ACM in Amexese) is the only exception to the rule.

 

I'd be interested to know how the tradeline reports as it is seperate from the base cardholder's tradeline and they are liable for the charges they incur: does it even list as AU at all?


The tradeline reports as the full $20K credit limit.  And the amount owed always comes up as the total for the account, not just my personal purchases.

 

As it was described to me when I requested the CLI based on my information, I could be held liable for unpaid charges I made on the card issued in my name but not any other charges.

The tradeline reports on my history (under the "Upgraded" version as well) with me as an Authorized User.  It says there that AU's aren't contractually responsible for the debt. 

 

Either AMEX just wanted me to think that I would be liable for my own purchases (when I am not) or the pop-up on the FICO credit report is generic information regarding AU's.


Thanks senor!

 

The popup is certainly generic: Amex T&C is where it's at and that's what's legally enforceable or not.  MyFICO is great for a lot of things, but that level of sophistication isn't one of them.




        
Message 14 of 27
IamB2
Established Contributor

Re: Authorized User Accounts


@bobebob wrote:

I am an AU on my Mom's AMEX account and I would dissagree with some of the above:

I became an AU not because my credit scores weren't high enough (in signature), but because my mom is the one on the Costco account and AMEX card and for what ever reason, they couldn't make it a joint account.  And guess whose very own actions make sure the bill gets paid every month? Smiley Happy

 

I also asked for and we recieved a significant CLI (from about $5K to $20K) based on my personal credit history, not hers.  I was informed that I personally would be held responsible for any unpaid bills incurred on the card issued in my name.

 

Don't lump all AU's into the same lot.


I am not sure how one can disagree with the statement from CreditBob. Inclusion of the Primary account holder's history on the AU's history does not, within of itself demonstrate financial responsibilty over the life of the TL by the Authorized User. Don't get me wrong, I am an authorized user on two cards, and I love the ability to have that, but honestly, I did nothing to earn that perfect history for the past few years. It was the primary card holder who showed financial responsibility. I am just reaping off the benefits. But again, I DID NOTHING to earn that "status".

 

I love the fact that this option is still included, and I hope it continues, but one cannot, logically, disagree with the statement that for the most part the Authorized Users did nothing to earn the account holders' credit history. By including the entire history of the Primary Account holder, we are utilizing a loophole. Maybe if we included the history of the Authorized Users only AFTER they were added as a user? Just like Amex does sometimes with backdating?

 

Just my thoughts.

FICO® EQ 717 (3/5/15); TU08 732 (3/5/15); EX: 723 (3/5/15) - Last app 3/15/15; Inquiries: A TON!

CITI ThankYou Preferred - CL: $2,000




Starting Scores: 590s on 12/2013. Hover over card image to view details! *After Amex approvals - [I was supposed to be] Gardening!*
Message 15 of 27
HiLine
Blogger

Re: Authorized User Accounts


@IamB2 wrote:

@bobebob wrote:

I am an AU on my Mom's AMEX account and I would dissagree with some of the above:

I became an AU not because my credit scores weren't high enough (in signature), but because my mom is the one on the Costco account and AMEX card and for what ever reason, they couldn't make it a joint account.  And guess whose very own actions make sure the bill gets paid every month? Smiley Happy

 

I also asked for and we recieved a significant CLI (from about $5K to $20K) based on my personal credit history, not hers.  I was informed that I personally would be held responsible for any unpaid bills incurred on the card issued in my name.

 

Don't lump all AU's into the same lot.


I am not sure how one can disagree with the statement from CreditBob. Inclusion of the Primary account holder's history on the AU's history does not, within of itself demonstrate financial responsibilty over the life of the TL by the Authorized User. Don't get me wrong, I am an authorized user on two cards, and I love the ability to have that, but honestly, I did nothing to earn that perfect history for the past few years. It was the primary card holder who showed financial responsibility. I am just reaping off the benefits. But again, I DID NOTHING to earn that "status".

 

I love the fact that this option is still included, and I hope it continues, but one cannot, logically, disagree with the statement that for the most part the Authorized Users did nothing to earn the account holders' credit history. By including the entire history of the Primary Account holder, we are utilizing a loophole. Maybe if we included the history of the Authorized Users only AFTER they were added as a user? Just like Amex does sometimes with backdating?

 

Just my thoughts.


His circumstances are different. He is an American Express Additional Card Member, not an Authorized User. When you are an Amex ACM, you actually have a separate credit line and are held responsible for it. If you are an Authorized User with other card issuers, you are not held reliable for anything.

Message 16 of 27
CreditBob
Established Contributor

Re: Authorized User Accounts

It's great to get people getting this discussion going. I know that my post has everyone's attention. Everything in relation to authorized user accounts to the fico score is from feedback from both Myfico customer care & lenders. So regardless of any disagreements there are certain requirements that have to be met in order to have the score rating which is listed below. So from the start here how it works.

 

Person applies in person as the primary or secondary account hold if a cosigner is needed (both individuals have a credit report pulled)

An inquiry or inquires is added to the credit report.

Primary or secondary account holder starts making monthly payments directly to the lender (electronic payment, in person, or by mail)

 

If the the person hat has authorized user accounts on their credit report & wants to get their own accounts then here is how it works. Again, this is coming from lenders and they will not budge or change on how they do things.

 

All authorized user accounts will be ignored as well as the score.

 

If there is a mix of AU accounts & actual accounts that are owned by the applicant, then the age & payment history of the owned acoounts will be used. However, the score part will not be fully used.

Message 17 of 27
RebuildingFlorida
New Contributor

Re: Authorized User Accounts

I would suggest we keep in mind that there are literally millions of spouses that would be disenfranchised if this was to happen.  Know that these people are voters (as are their spouses) and that the politicians are all very wary of getting this large of a group unhappy.

 

Where the financial institutions have the capacity to make their own algorithms to determine how they lend, the FICO and related scoring indexes have to answer to the Consumer Financial Protection Bureau.  My .02, where I might agree with what the financial institutions are trying to do, I don't think that the public will support the current strategy.  They tried this before and it was effectively rejected by the public.

Message 18 of 27
Revelate
Moderator Emeritus

Re: Authorized User Accounts


@RebuildingFlorida wrote:

I would suggest we keep in mind that there are literally millions of spouses that would be disenfranchised if this was to happen.  Know that these people are voters (as are their spouses) and that the politicians are all very wary of getting this large of a group unhappy.

 

Where the financial institutions have the capacity to make their own algorithms to determine how they lend, the FICO and related scoring indexes have to answer to the Consumer Financial Protection Bureau.  My .02, where I might agree with what the financial institutions are trying to do, I don't think that the public will support the current strategy.  They tried this before and it was effectively rejected by the public.


I wholeheartedly agree with everything you state; however, I can't imagine the lenders aren't unaware of what happened last time, so I suspect they have a strategy this time to address that.  I don't know what that'll be though and I think it's going to be just as unpopular.




        
Message 19 of 27
jeffeverde
New Contributor

Re: Authorized User Accounts

So here's what the new scoring model does to people with AU accounts-

CR-

4 CO'd CC's  5-1/2yrs old

4 CA's for those CO'd CC's

1 Tax lien, released 1-1/2 yrs ago

2 Current CC's as AU

 

In December 2013, I applied and got a mortgage.  The lender's combined CR listes scores of-

666   EFX Beacon 5.0

651   TU   FICO classic 4

646   EXP FICO-II

 

 

After the mortgage started reporting, my credit monitoring indicated a 13 point bump to my scores

 

Fast forward to today.  With NO changes to my report other than the new mortgage (no new inquiries, no new baddies, no utlization change).  I set up a utility for the house, and applied for a CC, and they came back with these numbers-

561   TU  FICO (type not specified)

421   EXP   (type not specified) Utility company's proprietary score - not relavent

 

That's an overnight drop of 225 points on a single score, strictly based on the algorithm change.

 

A 90 point drop between FICO-04 and whichever FICO Discover is using now

 

 

Message 20 of 27
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