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smiths38
Posts: 108
Registered: ‎09-29-2012

Will being an authorized user,raise my score or not?

I want to apply for an FHA loan,but I would like to raise my score as much as possible.My wife has a firestone card with a 0 balance and a $1600 limit.So,if she makes me an authorized user will it raise my score or not? Some say it will and some say it won't.



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llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: Will being an authorized user,raise my score or not?


smiths38 wrote:

I want to apply for an FHA loan,but I would like to raise my score as much as possible.My wife has a firestone card with a 0 balance and a $1600 limit.So,if she makes me an authorized user will it raise my score or not? Some say it will and some say it won't.


The answer is...it depends.

 

It depends on a number of factors including whether or not the TL has any prior lates reporting, whether or not you have a good mix of credit, whether or not the card helps or hurts utilization, whether it helps or hurts AAoA, whether it helps your overall length of history, whether or not it reports a balance, and whether or not the TL is new.

 

Adding it could possibly hurt your FICO if...

1) It lowers your AAoA when added.

2) It is younger than a year.

3) It has any reported lates, has a status other than "paid as agreed", or has any derog comments.

4) It reports a balance and results in most of your reported accounts reporting a balance. FICO doesn't like that.

5) The balance and CL being added negatively impacts your overall utilization.

 

Adding it can possibly help your FICO if...

1) You only have 0 to 2 CCs already.

2) The balance and CL being added to your profile helps your overall utilization.

3) It becomes your oldest TL reporting or oldest among a given category like oldest revolving.

4) It's age increases AAoA after it reports.

 

 

Certainly your new AU might cross both sides of the aisle. I'd say length of history, payment history, and impact to util are the most important when deciding. It depends what the pos/neg items are on your FICO report.

Mega Contributor
RobertEG
Posts: 17,272
Registered: ‎03-19-2007

Re: Will being an authorized user,raise my score or not?

I would also suggest that prior to adding the history of another to your scoring, you inquire with the lendor as to its potential impact in their decision making.

 

Some lendors may wish to see your score based only on your own credit history.  The addition of an AU to your scoring will prevent them from doing so, as they have no way to "back out" that history and produce a score that excludes it. 

For the same reasons that you cant tell in advance the specific impact it may have, neither can a lendor after the fact.


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