Valued Member
backtogood
Posts: 29
Registered: ‎02-06-2013
Untilization question

Hello everyone..

Quick question for credit card utilization.
Started working on my wifes credit.  She is currently an authorized user on one of my smaller credit cards of $300 limit, which has a utlization of about 65% for a few months. Her AAoA is about 2 yrs. She is Fairly new to credit and recently was approved for a new credit line with Jared for $1500.  We don't plan to use the account but have it simply for utilization (I also added myself as an auth user to this acct for my credit). When this new account shows up on her credit reports im curious to know how it will effect her score based on a new utilization of roughly 12% or being as her accounts are so new, Im wondering if the effects will not be as much as anticipated... any thoughts, appreciated.. thx

CL's: Cap1 Sec $300 / Cap1 Pref $300 / FPBank $300 / FH $100 / Jared $1500 / Discover $2000
Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007
Re: Untilization question

backtogood wrote:

Hello everyone..

Quick question for credit card utilization.
Started working on my wifes credit.  She is currently an authorized user on one of my smaller credit cards of $300 limit, which has a utlization of about 65% for a few months. Her AAoA is about 2 yrs. She is Fairly new to credit and recently was approved for a new credit line with Jared for $1500.  We don't plan to use the account but have it simply for utilization (I also added myself as an auth user to this acct for my credit). When this new account shows up on her credit reports im curious to know how it will effect her score based on a new utilization of roughly 12% or being as her accounts are so new, Im wondering if the effects will not be as much as anticipated... any thoughts, appreciated.. thx


There's a lot of things happening at once...

 

Her FICO will be dinged due to the new account and possible change in AAoA (not enough info to calc AAoA, but it really doesn't matter anyway). However, that ding might be offset with the new TL due to utilization and/or changed in her mix of credit. If this will be her 2nd CC reporting, then know that util isn't as big as if she had 3+ CC, however, on util alone going from 65% to 12% might result in enough of a gain to offset that new ding and then some. On util alone, I think she'll see a net gain when it first reports. Then there's also a potential for an improvment to mix. If she only had one CC before, then her mix improves and that will result in an additional gain, especially since this will probably be reported as a store charge. I wouldn't be surprised if she saw a gain of 30+ on the EQ FICO in here, and maybe a hair less on TU.

Established Contributor
jackg
Posts: 557
Registered: ‎04-26-2007
Re: Untilization question

In the long run, what you did for her will work out well. My advice would be to sit still for a couple months and see what the final impact is to her score & move forward accordingly.

FICO scores on 07/31/14:
EX=730
EQ=716
TU=740
Valued Member
backtogood
Posts: 29
Registered: ‎02-06-2013
Re: Untilization question

Thanks for the input!

agreed - will let the cc simmer for a bit and see where it takes off.... However.....

 

One other question please .. :smileyhappy: - she has the ability to be placed as an authorized user on a 15k credit line through her father - He carries a 0 balance monthly on the account as thier business pays it off each month. Would anyone recommened this?? (outisde the realm of possibilities that act would ever go bad/NEG-most likely 99% sure extremely unlikely) any suggestions on this?

 

 

 

CL's: Cap1 Sec $300 / Cap1 Pref $300 / FPBank $300 / FH $100 / Jared $1500 / Discover $2000
Established Member
rkdavie
Posts: 13
Registered: ‎01-12-2013
Re: Untilization question

Be careful.  Just because the account is paid off every month doesn't mean it will show a zero balance.  It will show the balance on the date the account is reported to the credit bureau.  (I learned this the hard way!)  This could mess up your utilization.

Valued Member
backtogood
Posts: 29
Registered: ‎02-06-2013
Re: Untilization question

Never even thought of that - good to know

CL's: Cap1 Sec $300 / Cap1 Pref $300 / FPBank $300 / FH $100 / Jared $1500 / Discover $2000