Authorized user

[Anonymous]

Someone added me to their Citi card as an authorized user in 2012 (without my permission). The credit limit was 10,000 and they immediately ran the utilization up to 90% which tanked my already strained credit score (low 500s). Fast forward to now, their card has been cancelled by Citi but is paid on time/never late on my credit report but as a closed account. The utilization is at 60%. I recently opened 2 sub prime credit cards with a total limit of $600. I PIF every month, keep utilization around 5-10% and my score is between 618 and 640. My question is this: would it help or hurt my credit to try and get the Citi card removed from my report? Does the benefit of 5 years of on time payment history outweigh the high utilization? CK shows my utilization to be at 5% but Experian says it's 100% because of the Citi card.

[Anonymous]

I am not entirely sure I understand how that AU account is reading on your report.  On the one hand, it reads that it is paid on time/never late, and closed.  If an account was always paid on time, and is now closed, then in theory it should have a $0 balance.  But if I am hearing you right it has a 60% utilization.

Was it closed very recently?  As in the last 60 days?  What date is given for the close date on the report?  What date is given for when the account was last updated on your report?

Are you still friendly with the person who added you as an AU?  If so, would it be difficult to get a straight answer as to whether he paid that account down to $0 and if so when?

If he paid it down to $0 and it shows as such on his reports, then maybe the solution is to dispute the large balance that shows on your report.  The CRA will do an investigation and then change it to $0 (assuming it's true that the account is in good standing with a $0 balance).  This way you get the benefit of a 5 year old closed account on your report with none of the drawbacks of a high util.

See if you can bounce what I just said off someone more experienced in these matters.  RobertEG might be a good choice.

[Anonymous]

The person who owns the account changed bank accounts and Citi mistakenly billed the old account twice. They also billed the new account. They got paid but they automatically closed the account and the owner didn't fight it. When it was closed, it had an $8000 balance which she was obviously still required to pay and has been paying every month. So the account is closed, but not charged off. She is still paying the balance down by minimum payment increments every month. It still appears on my credit report as closed and a $5000 debt, but on time/never late. That's why I need to know if it's better to leave it or try to get it removed. I hope that answers your question.

[Anonymous]

I should clarify, they mistakenly billed the old bank account and it was returned. It was an error on their part because they also billed the new account and got paid. For the life of me I don't know why she didn't fight it, but the folks at Citi were not very helpful.

[Anonymous]

It was closed 2 years ago

[Anonymous]

So the answer is this.  The current balance is reporting correctly: it really is big.  It is very slowly going down, but it won't get paid off for a long time.

Does that sound right?

If so, I would definitely try to get removed as an AU.  I have never been an AU myself so I don't know what is involved with that.  Other people here on the forum do know.

Until you get that account removed, your score will be severely hurt.  All $5000 of the debt will count in your utilization calculation, but that card's credit limit won't count at all, since it is closed.  That means you will have a total utilization of > 100%.  Extremely bad news.

The GREAT news is that as soon as you can get the AU account deleted, your score will get a huge boost.

[Anonymous]

Yes, you got it. I was confused about how they calculate the utilization because 2 of the bureaus show me at very low utilization and only Experian shows the 100%, although all 3 list the Citi account under closed accounts. So I wasn't sure if it's helping or hurting me.

[Anonymous]

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@Anonymous wrote:
Yes, you got it. I was confused about how they calculate the utilization because 2 of the bureaus show me at very low utilization and only Experian shows the 100%, although all 3 list the Citi account under closed accounts. So I wasn't sure if it's helping or hurting me.

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Are you basing that off of what Credit Karma's summary page says?  That will not tell you what even Karma's own scoring model is understanding your utilization, and that model is Vantage Score, not FICO. 

The actual reports themselves that you get from Karma are great.  And what it says about utilization is usually accurate.  But its summary of your utilization doesn't handle unusual cases especially well -- like when you have a closed account with a positive balance, or when your utilization is very low (Karma will round it down to 0% when it should round it up to 1%).

Your FICO score at all three bureaus is likely being severely hurt -- assuming that this AU account appears on all three bureaus and with the same balance and as a closed account.

[Anonymous]

Thanks for clearing that up for me! I just submitted the dispute.

[Anonymous]

Well I submitted the dispute, they processed it and removed the account from my report. My score immediately dropped 22 points. You live and you learn, I guess.