topic Re: Should I remove my oldest tradeline? in Credit Cards

Should I remove my oldest tradeline?

800Hopeful — Fri, 26 Jul 2024 19:05:45 GMT

Here's the situation: I'm joint co-owner on a Discover card with my brother. The tradeline has perfect payment history and 25 years old. BUT, my brother keeps the card at 50% utilization so that absolutely crushes my score each month. He just doesn't care about paying it down *before* it reports to the bureaus. It's his card and I don't even use it. I asked him to add me several years ago because I only had tradelines a few years old so it helps a lot with the average age of accounts. BUT what I'm debating now since I can't convince my brother to lower the utilization, should I just remove myself from that card and take back control of my FICO? Or will removing myself from that card have such a big impact on my average age of accounts (since all of my other credit cards are only a few years old) that it's not worth it and I should just suck it up and take the 50% utilization reporting on that card?

Thanks in advance!

Re: Should I remove my oldest tradeline?

GZG — Fri, 26 Jul 2024 19:20:26 GMT

@800Hopeful wrote:
Here's the situation: I'm joint co-owner on a Discover card with my brother. The tradeline has perfect payment history and 25 years old. BUT, my brother keeps the card at 50% utilization so that absolutely crushes my score each month. He just doesn't care about paying it down *before* it reports to the bureaus. It's his card and I don't even use it. I asked him to add me several years ago because I only had tradelines a few years old so it helps a lot with the average age of accounts. BUT what I'm debating now since I can't convince my brother to lower the utilization, should I just remove myself from that card and take back control of my FICO? Or will removing myself from that card have such a big impact on my average age of accounts (since all of my other credit cards are only a few years old) that it's not worth it and I should just suck it up and take the 50% utilization reporting on that card?

Thanks in advance!

are you actually a 'joint co-owner' or are you just an authorized user?

based on what you said about only being added a few years ago, you are likely an authorized user, not a joint co-owner.

a joint co-owner actually is responsible for the debt, so you would not be able to remove yourself, you would have the authority to close the account and you'd be jointly and equally responsible for that debt

if you are just an authorized user, get yourself removed.

the account isn't in your name and you're not personally responsible for it, FICO likes it, but it's fake, it's not yours and most creditors underwriting understands that and discounts authorized user information when they make creditor decisions and on top of that, the high balance on the card will be seen as a negative against you, so a lose-lose there.

discover also will do an off-cycle credit reporting update of the balance if you pay the balance, idk if they will do that if the authorized user requests it or if it has to come from the account owner

Re: Should I remove my oldest tradeline?

JoeRockhead — Fri, 26 Jul 2024 19:32:47 GMT

Sounds like you're an authorized user. Have yourself removed. You'll build a better score and file using credit in your own name.

Re: Should I remove my oldest tradeline?

800Hopeful — Fri, 26 Jul 2024 22:56:45 GMT

Thanks guy but just to clarify I am a joint co-owner, not an authorized user. This was back when Discover still allowed one to add a co-owner so I'm "grandfathered" into that with this account.

Re: Should I remove my oldest tradeline?

ptatohed — Sat, 27 Jul 2024 01:07:00 GMT

Does Brother PIF in full each month and this 50% is his regular monthly spend, or is he carrying a balance of 50% month after month?

Re: Should I remove my oldest tradeline?

Thomas_Thumb — Sat, 27 Jul 2024 01:55:09 GMT

@800Hopeful wrote:
Here's the situation: I'm joint co-owner on a Discover card with my brother. The tradeline has perfect payment history and 25 years old. BUT, my brother keeps the card at 50% utilization so that absolutely crushes my score each month. He just doesn't care about paying it down *before* it reports to the bureaus. It's his card and I don't even use it. I asked him to add me several years ago because I only had tradelines a few years old so it helps a lot with the average age of accounts. BUT what I'm debating now since I can't convince my brother to lower the utilization, should I just remove myself from that card and take back control of my FICO? Or will removing myself from that card have such a big impact on my average age of accounts (since all of my other credit cards are only a few years old) that it's not worth it and I should just suck it up and take the 50% utilization reporting on that card?

Thanks in advance!

You don't provide any info on age of the Discover card or age of your other personal credit card accounts. Also, no info on credit limit of the Discover card and other CC accounts you have. Those details are important in assessing your situation.

Generally speaking AAoA is over hyped relative to impact on score. No idea what your's is now or what it would be if you are removed as joint owner. I would say - get out regardless. If AAoA stays over 3 years post removal any impact on score should be trivial.

Being liable for your brother's charges is bad news. You are liable as a joint account holder.

Re: Should I remove my oldest tradeline?

800Hopeful — Sat, 27 Jul 2024 02:28:44 GMT

The Discover card account is 27 years old. CL is 20k, which is in line with my other active cards. My other active accounts are only 1-5 years old. I have no concern about being liable for his charges as he is more than financially capable of paying for everything, and always will be.

Re: Should I remove my oldest tradeline?

800Hopeful — Sat, 27 Jul 2024 02:29:26 GMT

Yes, he's PIF each month and he just puts about 8-10k on the card each month.

Re: Should I remove my oldest tradeline?

Thomas_Thumb — Sat, 27 Jul 2024 03:01:57 GMT

So, it looks like your age of oldest account will drop from over 20 years to 5 years. That could shift you to a different scorecard - if you don't have older closed accounts on file.

It looks like your AAoA could drop from above 8 years to around 3 years. That, plus the lower AoOA may drop score 10-15 points, imo - assuming a clean credit file. Key point is not opening any new revolving accounts to drop newest account to new from other 12 months.

Not a fan of joint accounts and not seeing much value for the OP if other cards have similar CLs.

Fwiw: a couple important thresholds for cards are under 49% and under 29%. Going over 49% can have a substantial negative impact on score particularly if it causes aggregate UT to go above 9%. A 40 point drop vs optimized utilization is possible.

Full disclosure - I don't practice AZE1 or AZE2. I just PIF statement balances. That being said my "normal" monthly charges keep AG UT under 5% and any cards reporting under 20%. So, not a practioner of micromanaging payments.

Re: Should I remove my oldest tradeline?

JoeRockhead — Sat, 27 Jul 2024 09:56:35 GMT

I'm not sure they'd allow you to remove yourself from the account without closing it altogether. Have you asked them if that's possible?

Re: Should I remove my oldest tradeline?

800Hopeful — Sun, 28 Jul 2024 20:03:24 GMT

I have not, Joe. I didn't even consider that possibility. Will Discover not let me remove myself as a co-owner? If not, then I guess this whole thread is moot, sadly.

Re: Should I remove my oldest tradeline?

800Hopeful — Sun, 28 Jul 2024 20:14:40 GMT

Thanks, Thomas! I much appreciate your insight.

My credit file is clean as a whistle. Didn't used to be, but all the baddies dropped off after 7 years.

I've seen my Experian FICO go from 832 down to 802 as a result of the high utilization on my brother's Discover card. So a 30 point drop (you weren't far off from suggesting 40 point drop). I guess the question is (assuming Discover would even let me remove myself as joint without closing the account): Is it worth removing that 27yo tradeline with perfect payment history to get away from the high utilization? It's PIF each month, so it's not the same balance just rolling over each month, so I assume that helps?

My total utilization across all of my cards is 10%, but that's almost entirely due to the 50% utilization on my brother's Discover card.

My main card is the Amex Plat. I push about 15k a month through it, PIF each month. So that balance reports each month but because it's a charge card I guess the balance doesn't count against me.

The only other card I really use that reports a balace is my Chase Amazon Prime visa. I put about 3k a month on there, PIF each month, but it always reports a 2-3k balance. 20k limit, so not bad.

I guess in the grand scheme of things, it doesn't matter all that much since any FICO above 740 gives you the best rate on everything, anyway. But, much like you I think, I just like playing the game of keeping the highest FICO I can.

What is AZE1 and AZE2? Where do I learn about these?

Do you really have a perfect 850 FICO, by the way? I didn't know that was even possible. Where did you learn how to do that? Do you have a professional background in credit management or finance or something related? Or did you learn everything online?

Re: Should I remove my oldest tradeline?

GZG — Sun, 28 Jul 2024 20:14:33 GMT

@800Hopeful wrote:
I have not, Joe. I didn't even consider that possibility. Will Discover not let me remove myself as a co-owner? If not, then I guess this whole thread is moot, sadly.

are you actually a co-owner?

you can't use the terms "co-owner" and "authorized user" interchangably, they have drastically different meanings

Re: Should I remove my oldest tradeline?

800Hopeful — Sun, 28 Jul 2024 20:15:16 GMT

Hi GZG, yes, already clarified earlier in the thread I am actually a co-owner, not an authorized user.

Re: Should I remove my oldest tradeline?

GZG — Sun, 28 Jul 2024 20:19:42 GMT

@800Hopeful wrote:
Hi GZG, yes, already clarified earlier in the thread I am actually a co-owner, not an authorized user.

yup, then they likely aren't going to allow you off without the account being closed

you're going to need the terms of that co-owner agreement to confirm that, because that could be wrong, that's how it works with the apple card currently for co-owners

but regardless, I would not personally remove a heavily aged tradeline from my profile

what I would do, is before I go to apply for a credit product, is basically ask whoever added you to make a payment and then once that payment has posted, call up/chat discover and ask for a off-cycle credit reporting update so your score is as high as it can be.

I wouldn't be bothered by the flucatations every month when that card reports a balance, the fact that the card is getting used so much and paid off every much is a good thing for creditors, not a bad thing. All you need to do is optimize your score prior to a credit application by making sure you're following AZEO with low balances.

assuming you trust this person to pay off their balances and never leave you with the bill, of course, because that could happen at any time

Re: Should I remove my oldest tradeline?

Thomas_Thumb — Mon, 29 Jul 2024 00:05:10 GMT

@800Hopeful wrote:
Thanks, Thomas! I much appreciate your insight.

My credit file is clean as a whistle. Didn't used to be, but all the baddies dropped off after 7 years.

I've seen my Experian FICO go from 832 down to 802 as a result of the high utilization on my brother's Discover card. So a 30 point drop (you weren't far off from suggesting 40 point drop). I guess the question is (assuming Discover would even let me remove myself as joint without closing the account): Is it worth removing that 27yo tradeline with perfect payment history to get away from the high utilization? It's PIF each month, so it's not the same balance just rolling over each month, so I assume that helps?

My total utilization across all of my cards is 10%, but that's almost entirely due to the 50% utilization on my brother's Discover card.

My main card is the Amex Plat. I push about 15k a month through it, PIF each month. So that balance reports each month but because it's a charge card I guess the balance doesn't count against me.

The only other card I really use that reports a balace is my Chase Amazon Prime visa. I put about 3k a month on there, PIF each month, but it always reports a 2-3k balance. 20k limit, so not bad.

What is AZE1 and AZE2? Where do I learn about these?

Do you really have a perfect 850 FICO? I didn't know that was even possible. Where did you learn how to do that? Do you have a professional background in credit management or finance or something related? Or did you learn everything online?

You are correct, AMEX platinum doesnot count toward revolving utilization on Fico 8, 9, 10.

AZE1 is All Zero Except 1. It refers to a strategy of reporting a small balance on one revolving credit card only to optimize score. Also called AZEO.

Fico penalizes score if too many revolving accounts report balances regardless of their utilization levels. However, if no revolving accounts balances, Fico typically penalizes score 15-25 points. Why? Fico looks at zero balance reported as a lack of recent account activity. If all revolvers report $0 then Fico assumes there is "no recent revolving account activity" and assigns a penalty.

The AMEX is not a revolver and you would still get the penalty if that's your only card reporting a balance. That being said, as a joint owner on the Discover card, it does count as a revolver for you - so no AZ penalty even if all your personal cards report $0.

850 Fico 8 and Fico 9 score are not all that rare. About 2% of the scored population has an 850. The older Fico "mortgage" scores all top out below 850. I'll add a link to some tables on max credit scores by credit model later when I'm at my computer.

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/The-many-flavors-of-FICO-Editions-versions-and-variations/m-p/4222362#M98991

Yes, I have achieved all the scores in my signature. I no longer purchase 3B reports but, I'll add a link to an old post where I pasted a screen capture of scores.

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Our-Forums-FICO-High-Achievers-Who-has-at-least-one-FICO-Score/m-p/4906307#M121892

I am not a professional credit manager. I view it as a hobby and participate on MyFico to share knowledge and experience.

Re: Should I remove my oldest tradeline?

800Hopeful — Sun, 04 Aug 2024 22:49:57 GMT

Thanks, Thomas. Much appreciated. That's helpful. I guess based on that, since the Discover joint card will prevent me from getting an AZ point penalty, plus the fact it's almost 30 years old with perfect payment history and is PIF each month, I'll stick with it. Still don't even know if I could be removed from it without closing the account, but I'll just keep it as in. Thanks again for your help!

Re: Should I remove my oldest tradeline?

800Hopeful — Sun, 04 Aug 2024 22:51:04 GMT

Thanks, GZG! I didn't know about being able to request an off-cycle credit reporting update. Good to know. Thank you!