topic Re: Authorized User to Lower Util in Credit Cards

Authorized User to Lower Util

SecretAzure — Fri, 13 Mar 2015 03:17:57 GMT

Hi forum, my close friend has multiple credit cards with very high utilization on most of them, one of them nearly maxed. If I were to add him as an AU onto my card with a $0 balance and a higher limit than most of his cards combined will that raise his scores and lower his overall Util or will it further lower his scores by lowering his AAOA?

Thanks in advance,

Re: Authorized User to Lower Util

ksantangelo23 — Fri, 13 Mar 2015 03:21:26 GMT

Yes. The change (positive of negative) of his AAoA would depend on the age of the new accounts, vs the old accounts.

Re: Authorized User to Lower Util

SecretAzure — Fri, 13 Mar 2015 03:31:03 GMT

4/6 accounts are older than 2 years. Oldest card 6 yrs old

Re: Authorized User to Lower Util

ksantangelo23 — Fri, 13 Mar 2015 03:29:11 GMT

The effect on the AAoA will depend if your accounts are newer, or older than his.

Elaborating on my previous post, it will certainly lower his utilization. But the affect on his scores could be negated if it affects his AAoA heavily enough. Chances are his scores will go up a good amount

Re: Authorized User to Lower Util

SecretAzure — Fri, 13 Mar 2015 03:32:44 GMT

@ksantangelo23 wrote:
The effect on the AAoA will depend if your accounts are newer, or older than his.

Elaborating on my previous post, it will certainly lower his utilization. But the affect on his scores could be negated if it affects his AAoA heavily enough. Chances are his scores will go up a good amount

I see what you're saying now. His oldest card is 6 years and another 2 older than 3 years old. I think I would lower his AAOA a little and reduce his Util by a lot. IDK the weighting though so you're right, it could go either way.

Re: Authorized User to Lower Util

SecretAzure — Fri, 13 Mar 2015 12:00:00 GMT

Bumping for more opinions.

Re: Authorized User to Lower Util

takeshi74 — Fri, 13 Mar 2015 12:49:44 GMT

@SecretAzure wrote:
If I were to add him as an AU onto my card with a $0 balance and a higher limit than most of his cards combined will that raise his scores and lower his overall Util or will it further lower his scores by lowering his AAOA?

Do the math to determine the impacts to utilization and AAoA and also consider:

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

It could help with utilization but your friend just needs to get his balances down. Being an AU can help but one has to work on one's own tradelines and cannot just rely on being an AU. There are creditors and scoring models (in certain cases) that do not consider accounts where one is an AU.

If he has multiple cards with high utilization and one nearly maxed then scores are the least of his concerns right now. He needs to focus on getting utilization down on all cards as quickly as possible to minimize the risk of adverse action.

Re: Authorized User to Lower Util

SecretAzure — Fri, 13 Mar 2015 13:37:49 GMT

@takeshi74 wrote:
@SecretAzure wrote:
If I were to add him as an AU onto my card with a $0 balance and a higher limit than most of his cards combined will that raise his scores and lower his overall Util or will it further lower his scores by lowering his AAOA?
Do the math to determine the impacts to utilization and AAoA and also consider:
http://www.myfico.com/crediteducation/whatsinyourscore.aspx

It could help with utilization but your friend just needs to get his balances down. Being an AU can help but one has to work on one's own tradelines and cannot just rely on being an AU. There are creditors and scoring models (in certain cases) that do not consider accounts where one is an AU.

If he has multiple cards with high utilization and one nearly maxed then scores are the least of his concerns right now. He needs to focus on getting utilization down on all cards as quickly as possible to minimize the risk of adverse action.

That's his goal, he's got a new, better-paying job coming in April but he's been stuck in minimum payment world for a while and this has been more difficult for me to sit here and witness than it is for him to keep paying only the minimums. Lol.

Re: Authorized User to Lower Util

newhis — Fri, 13 Mar 2015 15:49:16 GMT

I think if you can add him to a card (not Amex) that is older or close to his AAoA that will benefit the most. Of course, the biggest jump will be when he gets each card below 30%. I think there are a lot of lost points when you get near the max even in a single card.

Re: Authorized User to Lower Util

SecretAzure — Fri, 13 Mar 2015 16:07:35 GMT

@newhis wrote:
I think if you can add him to a card (not Amex) that is older or close to his AAoA that will benefit the most. Of course, the biggest jump will be when he gets each card below 30%. I think there are a lot of lost points when you get near the max even in a single card.

You specified not Amex, why is that?

Re: Authorized User to Lower Util

newhis — Fri, 13 Mar 2015 17:07:46 GMT

@SecretAzure wrote:
@newhis wrote:
I think if you can add him to a card (not Amex) that is older or close to his AAoA that will benefit the most. Of course, the biggest jump will be when he gets each card below 30%. I think there are a lot of lost points when you get near the max even in a single card.
You specified not Amex, why is that?

Amex changed policy a few years ago, now AUs are reported to the bureaus as new accounts from the request date. So if you had your Amex for 3 years and add someone, their reports will show open date 03/13/2015.

Other banks still report the open date of the main cardholder on AUs account to the bureaus, so they will report the account as open since the original card was open.

Re: Authorized User to Lower Util

SecretAzure — Fri, 13 Mar 2015 17:58:48 GMT

@newhis wrote:
@SecretAzure wrote:
@newhis wrote:
I think if you can add him to a card (not Amex) that is older or close to his AAoA that will benefit the most. Of course, the biggest jump will be when he gets each card below 30%. I think there are a lot of lost points when you get near the max even in a single card.
You specified not Amex, why is that?
Amex changed policy a few years ago, now AUs are reported to the bureaus as new accounts from the request date. So if you had your Amex for 3 years and add someone, their reports will show open date 03/13/2015.

Other banks still report the open date of the main cardholder on AUs account to the bureaus, so they will report the account as open since the original card was open.

I added my sister with 0 credit history so I suppose in her case starting at day 1 is still better than no credit history? I'll just leave her on for a while before she applies for something on her own...just not sure for her long she'll have to be an AU in order to get an unsecure card from somebody. Any suggestions on a starting card?

Re: Authorized User to Lower Util

SecretAzure — Fri, 13 Mar 2015 21:35:34 GMT

@SecretAzure wrote:
@newhis wrote:
@SecretAzure wrote:
@newhis wrote:
I think if you can add him to a card (not Amex) that is older or close to his AAoA that will benefit the most. Of course, the biggest jump will be when he gets each card below 30%. I think there are a lot of lost points when you get near the max even in a single card.
You specified not Amex, why is that?
Amex changed policy a few years ago, now AUs are reported to the bureaus as new accounts from the request date. So if you had your Amex for 3 years and add someone, their reports will show open date 03/13/2015.

Other banks still report the open date of the main cardholder on AUs account to the bureaus, so they will report the account as open since the original card was open.
I added my sister with 0 credit history so I suppose in her case starting at day 1 is still better than no credit history? I'll just leave her on for a while before she applies for something on her own...just not sure for her long she'll have to be an AU in order to get an unsecure card from somebody. Any suggestions on a starting card?

Any suggestions?

Re: Authorized User to Lower Util

newhis — Fri, 13 Mar 2015 22:26:08 GMT

@SecretAzure wrote:
I added my sister with 0 credit history so I suppose in her case starting at day 1 is still better than no credit history? I'll just leave her on for a while before she applies for something on her own...just not sure for her long she'll have to be an AU in order to get an unsecure card from somebody. Any suggestions on a starting card?

Yes, Amex AU is good for a) people with no credit or b) don't have Amex on their own and won't apply for own Amex, so they can lock MSD until they apply on their own.

When you say 0 credit history you mean absolutely nothing on her report, not even a score? My first unsecured card was Discover without any credit history, opened a BoA secured card at the same time and at 7 months I got Amex PRG with 50k promo (Amex prequal site).

If you want suggestions from the experts you need to provide more information, income, scores, if student, what AUs show in her reports, limits, time reported, or anything else you can provide. I'm not expert, just started 1 year ago, but I read a lot.

Re: Authorized User to Lower Util

SecretAzure — Fri, 13 Mar 2015 22:53:19 GMT

@newhis wrote:
@SecretAzure wrote:
I added my sister with 0 credit history so I suppose in her case starting at day 1 is still better than no credit history? I'll just leave her on for a while before she applies for something on her own...just not sure for her long she'll have to be an AU in order to get an unsecure card from somebody. Any suggestions on a starting card?
Yes, Amex AU is good for a) people with no credit or b) don't have Amex on their own and won't apply for own Amex, so they can lock MSD until they apply on their own.

When you say 0 credit history you mean absolutely nothing on her report, not even a score? My first unsecured card was Discover without any credit history, opened a BoA secured card at the same time and at 7 months I got Amex PRG with 50k promo (Amex prequal site).

If you want suggestions from the experts you need to provide more information, income, scores, if student, what AUs show in her reports, limits, time reported, or anything else you can provide. I'm not expert, just started 1 year ago, but I read a lot.

0 like I can't even pull her up on CreditKarma because her social pulls up nothing for her. Didn't know that was possible. She's a student 1/3 way into college, no income really. Your input is very welcome.