Understanding FICO® Scoring

[DST]

I am an AU for a CC with a high balance, but is in good standing with the CC company (no lates, etc...) if I have myself removed as an AU will this boost my score or hurt it?

[nothingman02]

Depends.

Payment history - 35%

UTL - 30%

Age - 15%

So youve got to figure out what the gain would be. The best obviously would be if the original account holder brings down the balance too <9%. 

[Credit_repair]

depends on the rest of your credit profile.

If the CC is older than your own cc's age, then it is contributing to your AAoA and making that higher. On another hand, it is costing you some scores because of its high utility.

Maybe you can provide some basic info such as how many cc's do you have, their balances, their limits and how long they've been open, also this CC's info that you are an AU on...

I am sure people here will be able to guide you through understanding the impacts (if any) of having/ not having this card report.

[DST]

I have 4 CC including the AU CC

CC Limits/Balance/Yrs Open

1000/450/5yrs

500/127/4yrs

500/43/1yr

2500/1700/2yrs (AU CC)

[nothingman02]

Age contributes to 1) AAoA and 2) Payment history

Most important factors are;

1) Payment history - 35%

2) UTL - 30%

Followed by AAoA - 15%

So, Its hurting you right now becaue of UTL but that can be brought down.

If you remove this account, your AAoA is still not gonna change significantly (from 3 to 3.3 yrs)  and hence I dont see a whole lot of gain in your score. But you are gonna lose 2 years of payment history and there would be a ding for that. 

Hence, again, I would try and keep it if theres a possibility that in near future the original cardholder will bring the balance below 9% and would tend to maintain it that way. Otherwise, I would get rid of it if there are some good CC offers in line.

[Credit_repair]

Lets do some basic math... and I am new to this as well so if I am wrong, one of the other members will correct me...

Individual card Utilization:

1000/450/5yrs          45%

500/127/4yrs      25.4%

500/43/1yr       8.6% 

2500/1700/2yrs (AU CC)  68%

Ideally, for FICO Scoring purposes, you want each individual card to report $0 except for one that should  report <9% Utility.

Total Card utilization (Ideally, you want this to be <9%)

Including card you are AU on : 2320/4500 X100% = 51.55555 = 51.6%

NOT including the card you are AU ON: 620/2000X100% = 31%

Therefore your UTIL DOES go lower by 20% if you remove yourself.

Average Age of Accounts (Including card you are AU on) : 5+4+1+2 = 12/4 = 4 years?

Other members, Is this how we calculate AAoA? If not please correct me!!

Average Age of Accounts (NOT Including card you are AU on) 5+4+1= 10/3 = 3.33 years

Therefore, having the card is good for increasing the average Age of your account!

The others here can help more in determining which weighs more in Fico Scoring....

All the best

Message Edited by Credit_repair on 04-07-2009 05:20 PM

[nothingman02]

Inconrrect!! Having the AU card is NOT good for INCREASING the AAoA.

Currently, AAoA = 3 years and not 4 years.

AAoA = 3.3 after dropping the AU a/c.

The AAoA is not changing significantly and the payment history would be lost. Hence the account need not be removed unless the original cardholder CAN NOT bring down utl. down and keep it that way.

[Credit_repair]

Thank you Nothing...

Oops.... 12/4=3

In my Defense, I had an exhausting work day!!