06-06-2013 11:30 AM
Haven't been on this site in quite some time. I want to ask a question about the benefits of being put on a person's credit card.I have a family member that has not used his credit in years.He doesn't even have a credit score registering with the three CRA's. Someone suggested the idea of putting him on a friend's credit card, that it will automatically give him a score and a credit history.Is that true? He is dating someone that has agreed to add him on as an authorized user to a Discover card and to a Chase Preferred card. Both cards have excellent pay history and both are about 12 years histories.My questions are, will this make his credit appear to be 12 years old, and can he then qualify for his own credit cards? The limits on his girlfriend's cards have $8K + limits. Thanks for your advice
06-06-2013 11:34 AM
I have an AU on about half of my accounts and they show up on the AU's report with a start date of the month in which I added him, so I don't think he'll get 12 years' worth of "free" history but it'll start him on the path of getting a score so he can establish his own credit in a few months.
06-06-2013 12:40 PM
Most cards that do report AUs do report the full history. Seem like there are a couple of exceptions. However some lenders, like mortgage lenders, tend to frown on applicants who rely on AUs. Certainly don't rely on them, but IMO, it's a good temporary crutch.
06-08-2013 11:09 AM - edited 06-08-2013 11:09 AM
I added my wife to my Cap 1 secured MC and it reported full history on her CR. Boosted her scores about 10-15 points on all 3 CRA's as she had 0 other CC's.
I added her as an AU on mine, the history reported and then I app'd her for a Cap 1 Rewards card and she was approved with a $1000 CL. Her scores:
0 CC's before added as AU:
TU 598 (had a baddie)
TU 672 (got the baddie dropped)
Will see how they improve with the C1CR card added.
I will then AU myself to her new $1000 CL card as Cap 1 reports all 3 CRAs and full history.
I plan on AU'ing each other on all cards for max benefits.
Hope that helped.
06-09-2013 12:07 PM
+1 to llecs' comments
To the extent that the credit history of another is added to your file, yes, it will be included in your scoring.
So if a potential creditor is basing their decision primarily or only on a FICO score, any score improvement is likely to improve approval chances.
Many lower principal creditors will use FICO score as the primary basis for their decision making, as it is cheap and easy, requiring no manual review efforts.
It can thus be an excellent way to rebuild.
However, as the amount of the principal or credit limit requested increases, most creditors will dig a bit deeper.
Upon a manual review, seeing that one or more accounts are AU, and thus dont reflect the actual credit history of the consumer, that might throw the entire value of your score into question. Creditors have no way, upon receiving a credit report and associated score, to "back out" those accounts not reflective of the acutal consumer's credit history and generate a score based only on your cretit history, as they dont have the actual FICO scoring algorithm at hand.
It is usually best, in my opinion, to try to remove AU status as the consumer moves into higher limits of requested credit or credit limit.