topic Re: Adding an authorized user--Good Idea Or Bad? Looking for advice. in Credit Cards

Adding an authorized user--Good Idea Or Bad? Looking for advice.

Anonymous — Sun, 16 Aug 2015 16:30:00 GMT

I have spent the past two years rebuilding my credit. Right now, it is ruled as "good" credit. I recently applied for the Chase Disney rewards Visa and was approved. During the application process, I added an AU to help build that person's credit. Can this harm my credit in anyway? This person's credit file is very thin so I think a $3500 limit will help the building process. I am not sure if I am right or wrong. Any opinions and advice are very much appreciated. Thank you!

Re: Adding an authorized user--Good Idea Or Bad? Looking for advice.

CH-7-Mission-Accomplished — Mon, 17 Aug 2015 00:30:41 GMT

It can't hurt you unless they run up charges on your account. Best not to give them their own card unless you want them to use it.

You pose more of a risk to them. High utilization or missed payments could really hurt their scores.

Re: Adding an authorized user--Good Idea Or Bad? Looking for advice.

Anonymous — Sun, 16 Aug 2015 16:43:09 GMT

@CH-7-Mission-Accomplished wrote:
It can't hut you unless they run up charges on your account. Best not to give them their own card unless you want them to use it.

You pose more of a risk to them. High utilization or missed payments could really hurt their scores.

Not really. Any derogs from an AU account can be removed by the AU user by disputing it on the credit file. It can hurt them short-term till the derogs are removed, but no long-term damage.

Adding an AU is a risk, especially if your AU has a card. They can charge up charges that you are responsible for. Use an issuer where you can control the limit (e.g. Amex) on the AU card or one where you need not give the AU an AU card unless you are willing and able to take the risk of the AU racking up charges.

There is no universally correct answer with AUs. Both sides take some risks with an AU account. The authorized user could have a temporarily damaged credit score while disputing it if the cardholder has lates or lets the card utilization go up. The cardholder could be stuck with liability if the AU racks up charges. Balance the risk versus the reward and decide how you want to proceed. Good luck.

Re: Adding an authorized user--Good Idea Or Bad? Looking for advice.

Anonymous — Sun, 16 Aug 2015 16:59:08 GMT

It's like marriage.

Adding AU is putting on the ring and legally tied to each other.

Removing AU is getting divorced and one walks away with either a boatload of great stuff, or pays dearly for it.

i crack myself up

Re: Adding an authorized user--Good Idea Or Bad? Looking for advice.

CH-7-Mission-Accomplished — Sun, 16 Aug 2015 17:10:58 GMT

@Anonymous wrote:
@CH-7-Mission-Accomplished wrote:
It can't hut you unless they run up charges on your account. Best not to give them their own card unless you want them to use it.

You pose more of a risk to them. High utilization or missed payments could really hurt their scores.

Not really. Any derogs from an AU account can be removed by the AU user by disputing it on the credit file. It can hurt them short-term till the derogs are removed, but no long-term damage.

Adding an AU is a risk, especially if your AU has a card. They can charge up charges that you are responsible for. Use an issuer where you can control the limit (e.g. Amex) on the AU card or one where you need not give the AU an AU card unless you are willing and able to take the risk of the AU racking up charges.

There is no universally correct answer with AUs. Both sides take some risks with an AU account. The authorized user could have a temporarily damaged credit score while disputing it if the cardholder has lates or lets the card utilization go up. The cardholder could be stuck with liability if the AU racks up charges. Balance the risk versus the reward and decide how you want to proceed. Good luck.

But be warned, some card issuers will not remove an AU account that is disputed. Chase and AMEX are known to give people an awful time trying to get them off their reports.

Re: Adding an authorized user--Good Idea Or Bad? Looking for advice.

Anonymous — Sun, 16 Aug 2015 17:15:40 GMT

Yeah I'd be very careful with who you add to your accounts as an AU. I added my fiance to a few my cards to get her credit going but I made sure I either set a low limit($200) or just shredded the card right away after activation. Just remember this if you add them on as an AU. If you can't set a spending limit on your cards and add that person as AU, can you handle them maxing out whatever card they have? For me I'd say no because I don't have that kind of cash to just waste.

Re: Adding an authorized user--Good Idea Or Bad? Looking for advice.

OmarGB9 — Sun, 16 Aug 2015 17:21:07 GMT

Sounds like everyone here is assuming that whoever OP wants to make an AU is irresponsible. That very well could be, but then again it might not. OP, of course be cautious with your AU, but if you trust them and know they won't run up a balance and/or pay you back if they do, then you have nothing to worry about. As others have said already, you pose more of a risk to them if there are any late payments or high util on that AU account.

Re: Adding an authorized user--Good Idea Or Bad? Looking for advice.

Anonymous — Sun, 16 Aug 2015 17:42:56 GMT

Thank you for all of your responses. I appreciate the kindness and the warnings. I should have mentioned the AU would not get a card to the account. I only want to help build credit and after a year or two, when they have their own accounts, just remove them as an AU.

Re: Adding an authorized user--Good Idea Or Bad? Looking for advice.

OmarGB9 — Sun, 16 Aug 2015 17:55:32 GMT

That's a good strategy too.

Re: Adding an authorized user--Good Idea Or Bad? Looking for advice.

Anonymous — Sun, 16 Aug 2015 18:08:36 GMT

My couple month old BOA CR AU only added 2 points to each bureau (well not experian, that sucker never budges)...anywho

How much of a boost do you guys think I would see if I added myself as an AU to another BOA card but with a $30k limit and a 15 year perfect payment history and 3-5%util. If its gonna be more than 10 points I think I will do it.

Re: Adding an authorized user--Good Idea Or Bad? Looking for advice.

gdale6 — Sun, 16 Aug 2015 22:33:03 GMT

A complaint to the CFPB will usually result in a deletion on an AU account should a dispute not be productive. There really is no reason to have the entire TL removed once the relationship is terminated unless the account actually has derogs on it.

Re: Adding an authorized user--Good Idea Or Bad? Looking for advice.

Anonymous — Mon, 17 Aug 2015 00:02:26 GMT

I don't plan on using the card too much but I know chase reports whether there is use or not every month, more than once a month on one of my chase cards. I added the person to a store card with a $3500 limit but wanted to give them a Major account on their report too. Hope this helps and doesn't hurt me in any way

Re: Adding an authorized user--Good Idea Or Bad? Looking for advice.

Anonymous — Mon, 17 Aug 2015 03:28:10 GMT

So is it a good idea for husband and wife to share a cc account with one peron being an AU, say if one was able to get a cc but the other couldn't? Does it actually help build the credit of the AU?

Re: Adding an authorized user--Good Idea Or Bad? Looking for advice.

Anonymous — Mon, 17 Aug 2015 03:51:54 GMT

Luv2Cruise yes & no. It can helpful if the account holder makes payments on time, keeps utl low etc etc. But if the primary holder is maxing out the card and missing payments than that can actually hurt the person rather than help them.

Re: Adding an authorized user--Good Idea Or Bad? Looking for advice.

CH-7-Mission-Accomplished — Mon, 17 Aug 2015 04:37:11 GMT

@Anonymous wrote:
So is it a good idea for husband and wife to share a cc account with one peron being an AU, say if one was able to get a cc but the other couldn't? Does it actually help build the credit of the AU?

Yes.

You need at least three revolving cards open and reporting to maximize FICO. These three cards can all be authorized user accounts. Once the authorized user gets the benefit of these cards and a 50 point score increase, he/she may be able to get his/her own cards.

AU revolvers work just as well as primary issued cards for FICO. On manual review, though, they will be discounted by underwriters, so use them AU's to get your own cards when you are only talking to a computer.

Re: Adding an authorized user--Good Idea Or Bad? Looking for advice.

Anonymous — Mon, 17 Aug 2015 17:20:16 GMT

Ok so lets say my hubby was able to get 3 cards and I was only able to get one, I am disabled so not sure how they look at income. But he pays mortgage so I wouldn't have that to report. Anyway, so if I was on all of his accounts as an AU then I would also get the score increases he got as long as they were paid correctly? He doesn't really want any cc but I told him we need to rebuild our credit the right way once we discharge so even if he got cc's and I was an AU id probably be the one managing/using them anyway lol. SO if that was the case would there be a need for both of us to get our own seperate credit card accounts? Thanks

Re: Adding an authorized user--Good Idea Or Bad? Looking for advice.

gdale6 — Mon, 17 Aug 2015 20:07:50 GMT

@Anonymous wrote:
Ok so lets say my hubby was able to get 3 cards and I was only able to get one, I am disabled so not sure how they look at income. But he pays mortgage so I wouldn't have that to report. Anyway, so if I was on all of his accounts as an AU then I would also get the score increases he got as long as they were paid correctly? No, you dont get the same increases he would, scores are individual based on whats in ones credit file.

He doesn't really want any cc but I told him we need to rebuild our credit the right way once we discharge so even if he got cc's and I was an AU id probably be the one managing/using them anyway lol. SO if that was the case would there be a need for both of us to get our own seperate credit card accounts? Each of you needs 3 individual or joint revolving credit lines. What an AU can do for you is help you get started in the credit world but if you are already getting your own cards I would not be looking to get any AUs it just muddies the waters as the credit history is not yours alone.

Thanks

Re: Adding an authorized user--Good Idea Or Bad? Looking for advice.

CH-7-Mission-Accomplished — Mon, 17 Aug 2015 20:54:16 GMT

@Anonymous wrote:
Ok so lets say my hubby was able to get 3 cards and I was only able to get one, I am disabled so not sure how they look at income. But he pays mortgage so I wouldn't have that to report. Anyway, so if I was on all of his accounts as an AU then I would also get the score increases he got as long as they were paid correctly? He doesn't really want any cc but I told him we need to rebuild our credit the right way once we discharge so even if he got cc's and I was an AU id probably be the one managing/using them anyway lol. SO if that was the case would there be a need for both of us to get our own seperate credit card accounts? Thanks

Do you live in a community property state? If you do it is my understanding you can use half of your combined incomes to declare as your income.

Re: Adding an authorized user--Good Idea Or Bad? Looking for advice.

Cmikul — Mon, 17 Aug 2015 21:20:46 GMT

I have a newbie question about this. When you add an AU to a TL does the AU get a SP or a HP at all? Is the issuer not do either because they already have the primary on the line for liability?

Re: Adding an authorized user--Good Idea Or Bad? Looking for advice.

Anonymous — Mon, 17 Aug 2015 22:25:01 GMT

@gdale6 wrote:
@Anonymous wrote:
Ok so lets say my hubby was able to get 3 cards and I was only able to get one, I am disabled so not sure how they look at income. But he pays mortgage so I wouldn't have that to report. Anyway, so if I was on all of his accounts as an AU then I would also get the score increases he got as long as they were paid correctly? No, you dont get the same increases he would, scores are individual based on whats in ones credit file.

He doesn't really want any cc but I told him we need to rebuild our credit the right way once we discharge so even if he got cc's and I was an AU id probably be the one managing/using them anyway lol. SO if that was the case would there be a need for both of us to get our own seperate credit card accounts? Each of you needs 3 individual or joint revolving credit lines. What an AU can do for you is help you get started in the credit world but if you are already getting your own cards I would not be looking to get any AUs it just muddies the waters as the credit history is not yours alone.

Thanks

We haven't started trying to get any cc as of yet until after discharge! Thats why I was asking in case I was not able to get any cc since being disabled,credit score etc and if my only option was to be an AU on any cc my hubby got I ws trying to figure how it could help me credit or vise versa. We will try for our own cc 1st then do AU if we needed to. Thanks