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Yet another question about Authorized Usership...

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Anonymous
Not applicable

Yet another question about Authorized Usership...

I've been trying to rebuild my credit for a few months and have come up with a few stratagies. I understad the scoring factors and where I fall in relation to them. I've taken steps to insure that I continue positive payment history and such. I'm also taking steps the mitigate the impact of a few factors which are negatively impacting my credit score. (Low AAoA, a few paid collections, recent inquires) but I have a specifc question.

 

My mother has offered to add me as an AU on her Sears charge card. I have a few questions about the positive/negative impact that might have on my score. Her card information is as follows

 

1) Date opened = 1974

2) Payment history = excellent

3) Utiliztation ratio = 41%

 

MY current credit factors include

 

1) Utilization = 28%

2) AAoA = 8 months

3) Types of credit = only revolving (CC) but purchased a "Self Lender) Installment loan

4) Payment History = excellent

5) Number of accounts = 6

6) 2 paid collections and 1 unpaid collection

 

Will an AU from my Mom help me?

 

I don't know if it matters, but her AU card with the longest history is a Sears Charge card. Do charge cards count?

 

Any advice would be appreciated

4 REPLIES 4
Anonymous
Not applicable

Re: Yet another question about Authorized Usership...

You describe the card to which she would be adding you as a charge card.  Are you sure it is a charge card, rather than a credit card?  I ask for two reasons:

 

(1)  You describe the card as having an individual utilization of 41%.  But as I understand it (and I may be mistaken) a charge card can't have an individual utilization: that's what distinguishes a credit card (which has a credit limit) from a charge card (which doesn't).  Here's a longer article on the subject:

 

https://thepointsguy.com/2016/07/how-charge-cards-affect-score/

 

(2)  I spend the last 5 minutes using google to search for Sears Charge Card and all I can find are Sears credit cards.  No charge cards.

 

Let's suppose for a minute though that it is a credit card, or that it is a charge card but it still somehow acts as a credit card (unsure what that means exactly, but whatever).  Since your Mom wants to help you out, would she be willing to pay that card down to $0 and then use major credit cards for her purchases?  If so this is a slam dunk decision.  It would be a big help.

 

PS. You don't tell us your Age of Oldest Account, but that turns out to be the most important piece of information we could have in trying to assess the benefit of you being an AU on this old account.   I am guessing your Age of Oldest is low (like maybe 3 years) because your AAoA is low, but that's still guesswork.  What is your Age of Oldest Account?

 

PPS.  If your Mom can't or won't pay the card down to $0, then to assess its impact on your score we'll need to know the card's credit limit and its current balance along with your total credit limit and your total CC debt.   Adding a 41% utilized card that has a $300 credit limit when you have a $30,000 total credit limit will have almost no effect.  Adding a 41% utilized card that has a $10,000 credit limit when you have a $1000 total credit limit will have almost a much bigger effect. 

Message 2 of 5
Revelate
Moderator Emeritus

Re: Yet another question about Authorized Usership...

Paying down the card is in your mother's best financial interest anyway if there's an APR associated with it (unless special financing deals, there probably is).

 

Personally if I had the opportunity to get that AU I'd take it, and would recommend her paying it down / off anyway... balances on store cards are usually carry pretty high APR's historically.  Utilization can be worked around, an excellent history AU tradeline can jumpstart a lot of things even if it might be discounted by FICO 8 or lenders, for example it applies to every all algorithms used in 99.99% of the mortgage applications in the US, and you can always find lenders using the older scoring models if you need something.




        
Message 3 of 5
Anonymous
Not applicable

Re: Yet another question about Authorized Usership...

Thanks for your input. To answer your questions...

 

My age of oldest account is 1 year, 3 months.

My Moms Sears card currently has a balance of $2740 with a limit of 6050.

My utilization is a balance of 1100.00 with a 6500.00 limit.

 

Again, thank you for your advice!!

 

Message 4 of 5
Revelate
Moderator Emeritus

Re: Yet another question about Authorized Usership...


@Anonymous wrote:

Thanks for your input. To answer your questions...

 

My age of oldest account is 1 year, 3 months.

My Moms Sears card currently has a balance of $2740 with a limit of 6050.

My utilization is a balance of 1100.00 with a 6500.00 limit.

 

Again, thank you for your advice!!

 


On the assumption it's both reported and counted, gain ~6 years AAOA, some silly amount to oldest tradeline, for going to 30.6% utilization which you can tweak better by even just paying down your own card to $20 or whatever when you need to apply for something, in addition to suggesting to your mother to pay down the Sears card if it's interest bearing to be in her financial best interests... seems like a no-brainer personally while continuing to address the negatives.




        
Message 5 of 5
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