Parents Credit Card question

[Anonymous]

Hello!

When I was in college, my mom gave me one of her credit cards in my name (It's linked to her account..).  I am now 27 and obviously no longer use it but have just never cancelled it because I was afraid of the risk it would have on my credit score.  On my credit report it shows up and adds to the time I have had credit (as it uses how long my mom has had the account open, in all reality if this was really true I would have had the card since I was like 6..).  However, my mom uses the card for everything and has more revolving income than I do.  When she carries a large balance on the card, it negatively effects my score because of the large balance compared to my "available credit".  I feel stuck, would it be a better idea to just keep the card so that I have the time that positively adds to my score or would I be better off cancelling the card so that I don't have to carry these large balances on my account any longer?  I hope this makes sense..thanks so much!

CB

[pizzadude]

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@Anonymous wrote:

Hello!

When I was in college, my mom gave me one of her credit cards in my name (It's linked to her account..).  I am now 27 and obviously no longer use it but have just never cancelled it because I was afraid of the risk it would have on my credit score.  On my credit report it shows up and adds to the time I have had credit (as it uses how long my mom has had the account open, in all reality if this was really true I would have had the card since I was like 6..).  However, my mom uses the card for everything and has more revolving income than I do.  When she carries a large balance on the card, it negatively effects my score because of the large balance compared to my "available credit".  I feel stuck, would it be a better idea to just keep the card so that I have the time that positively adds to my score or would I be better off cancelling the card so that I don't have to carry these large balances on my account any longer?  I hope this makes sense..thanks so much!

CB

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Welcome to the forums !

Cancelling a credit card only impacts your FICO score if your revolving utilization increases as a result of losing the credit limit.     Here's a link with more info:   http://ficoforums.myfico.com/t5/Credit-Cards/Closing-Credit-Cards/td-p/347190

Can you share some more info about your credit profile ?   How many cards are open and in your name, and do you normally carry any balances on them ?

[Anonymous]

Thanks! I have a 728 score currently.  I have five credit cards, not including this one of my moms.  One of which I have about a $1500 balance on, which I pay more than the min. on each month and another that I just bought a couch on which has about $700 left on it that will be paid off within the next 6 months.   I just bought a house and have a monthly car payment.  I also have student loans (roughly $22,000) that I'm working on paying down. 

[pizzadude]

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@Anonymous wrote:

Thanks! I have a 728 score currently.  I have five credit cards, not including this one of my moms.  One of which I have about a $1500 balance on, which I pay more than the min. on each month and another that I just bought a couch on which has about $700 left on it that will be paid off within the next 6 months.   I just bought a house and have a monthly car payment.  I also have student loans (roughly $22,000) that I'm working on paying down. 

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FICO scoring weighs your revolving utilization ( CCs ) very significantly, much more than your installment balances like student loans.   

What are each of your cards credit limits and balances ?   

[Anonymous]

One of the cards is a $5,000 limit with $1500 balance.  The other is $3000 limit with $800 balance.  The other three are store cards with minimum limits (all under $1000 but not sure of specifics) with no balances and rarely used.

[pizzadude]

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@Anonymous wrote:

One of the cards is a $5,000 limit with $1500 balance.  The other is $3000 limit with $800 balance.  The other three are store cards with minimum limits (all under $1000 but not sure of specifics) with no balances and rarely used.

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Well it sounds like your revolving utilization isn't too bad, maybe around 25% or so.    Is your mom's cards utilization regularly much higher than that or maxed out ?

[Anonymous]

Shes not maxed out but yes her utilization is much higher.  I'm not positive how much she pays off each month but I know its more than the minimum and at times may be the entire balance. More times than not though, I get a score watch alert saying that my score has gone down because the balance has increased significantly on that card.  Its frustrating because it's not my spending that is effecting my score but I don't want to be penalized even more so for cancelling the account in my name.

[pizzadude]

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@Anonymous wrote:

Shes not maxed out but yes her utilization is much higher.  I'm not positive how much she pays off each month but I know its more than the minimum and at times may be the entire balance. More times than not though, I get a score watch alert saying that my score has gone down because the balance has increased significantly on that card.  Its frustrating because it's not my spending that is effecting my score but I don't want to be penalized even more so for cancelling the account in my name.

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If you are going to apply for a major purchase soon and need to tweak your FICO score then I'd probably go ahead and remove yourself from the card.    If you think that she will continue to let large balances report, it would make sense to remove yourself.    Sometimes when you are removed as an AU the account will still remain on your reports with a "relationship terminated" status or something similar....so you may still get the benefit of having the positive age.

[RobertEG]

+1

Most likely, the major benefit of retaining your AU status (I am presuming you are only an authorized user, and not responsible on the account) is its age in calculating your average age of accounts.  Calculate your AAoA with and without that account, and you will know how much it is impacting.

Compare that with the down-sides of having a revolving util that you cant control, and the fact that any creditor wishing to evaluate your risk based on your own history wont be able to do produce a score representative only of your risk, and I would speculate that it might be time to wean.