topic If I add my son as an authorized user how will it affect his credit? in Credit Cards

If I add my son as an authorized user how will it affect his credit?

Anonymous — Mon, 11 Jun 2012 18:49:22 GMT

I want to add my son as an authorized user to my credit card so he can start building credit and have it for college. He's quite responsible with money, he's actually been helping me pay bills since he was around 13-14 years old, so I'm not worried about not trusting him. The thing is, will any negative things on my account from years ago affect him at all? If, for example, my credit card has late payments will it affect him? The guy on the phone with capital one told me that it should start affecting his credit with what is on the account from the time he is added, but I am not sure if this is correct because the guy told me he is not a credit expert and he is not totally sure. What do you guys think?

Re: If I add my son as an authorized user how will it affect his credit?

pizzadude — Mon, 11 Jun 2012 18:58:12 GMT

@Anonymous wrote:
I want to add my son as an authorized user to my credit card so he can start building credit and have it for college. He's quite responsible with money, he's actually been helping me pay bills since he was around 13-14 years old, so I'm not worried about not trusting him. The thing is, will any negative things on my account from years ago affect him at all? If, for example, my credit card has late payments will it affect him? The guy on the phone with capital one told me that it should start affecting his credit with what is on the account from the time he is added, but I am not sure if this is correct because the guy told me he is not a credit expert and he is not totally sure. What do you guys think?

Any AU that you add will inherit your entire payment history, so if there are late payments on the account then I would advise not adding him to your account.

Re: If I add my son as an authorized user how will it affect his credit?

MarineVietVet — Mon, 11 Jun 2012 18:59:15 GMT

@Anonymous wrote:
I want to add my son as an authorized user to my credit card so he can start building credit and have it for college. He's quite responsible with money, he's actually been helping me pay bills since he was around 13-14 years old, so I'm not worried about not trusting him. The thing is, will any negative things on my account from years ago affect him at all? If, for example, my credit card has late payments will it affect him? The guy on the phone with capital one told me that it should start affecting his credit with what is on the account from the time he is added, but I am not sure if this is correct because the guy told me he is not a credit expert and he is not totally sure. What do you guys think?

Hello and welcome to the forums.

He will inherit the entire history of this account both good and bad and will do so as soon as it starts reporting. Also any new negatives going forward will impact his score.

Being added as an AU can help him IF the account is older than any of his (older than his current AAoA is even better), IF the payment history is long and clean, IF the utilization is very low, and IF it will report to the CRA's. Not all cards will do this. You need to ask the company first.

ETA: Out typed by pizzadude!

Re: If I add my son as an authorized user how will it affect his credit?

Smerri1029 — Mon, 11 Jun 2012 19:19:07 GMT

Not to hijack the thread but hopefully more of an addition:

If I were to add my brother as an AU on my Chase United card, I now know he would get the whole history but if in 6-12 months I remove him, will it just disappear from his reports or would it still show as maybe a closed account for him?

Re: If I add my son as an authorized user how will it affect his credit?

pizzadude — Mon, 11 Jun 2012 19:21:47 GMT

@Smerri1029 wrote:
Not to hijack the thread but hopefully more of an addition:

If I were to add my brother as an AU on my Chase United card, I now know he would get the whole history but if in 6-12 months I remove him, will it just disappear from his reports or would it still show as maybe a closed account for him?

It depends....sometimes the accounts are deleted, and sometimes they just stop updating. To get the AU accounts removed it might take a little addional work ~ either calling the creditor directly and following up to request removal, or disputing with the CRAs.

Re: If I add my son as an authorized user how will it affect his credit?

Anonymous — Mon, 11 Jun 2012 19:23:06 GMT

Hmm... alright - but this would be his first line of credit ever. So this would be the oldest of all of what he has as it would also be the first. Would that hit him with late payments still? If the answer is yes then I will set up a secured card.

Re: If I add my son as an authorized user how will it affect his credit?

pizzadude — Mon, 11 Jun 2012 19:32:23 GMT

@Anonymous wrote:
Hmm... alright - but this would be his first line of credit ever. So this would be the oldest of all of what he has as it would also be the first. Would that hit him with late payments still? If the answer is yes then I will set up a secured card.

How many late payments are there, and how severe ? 30, 60, 90 days ? How long ago did they occur ? I would lean towards not adding negative accounts to his CRs.

Re: If I add my son as an authorized user how will it affect his credit?

Revelate — Mon, 11 Jun 2012 20:45:54 GMT

@pizzadude wrote:
@Anonymous wrote:
Hmm... alright - but this would be his first line of credit ever. So this would be the oldest of all of what he has as it would also be the first. Would that hit him with late payments still? If the answer is yes then I will set up a secured card.
How many late payments are there, and how severe ? 30, 60, 90 days ? How long ago did they occur ? I would lean towards not adding negative accounts to his CRs.

That's really the key question.

Open up two secured cards for him now would be my recommendation.

If the tradeline you're considering has it's last late 5-6 years ago, you can consider adding him at some point pre-next application round for your son. That probably is a few years anyway since it requires declarable income, and the important thing is to get his own tradelines setup as soon as possible. The AU on the other hand doesn't have to be done right now, if it makes sense later, do it, if not, no huge loss.

Edit: for this one particular case, focus on secured cards that graduate. I don't know your son and what his collegiate plans are, but in the case that he remains financially dependant for the next 4-5 years, those graduated cards get around the usual 2-3 year shelf-life of most secured credit cards.

Re: If I add my son as an authorized user how will it affect his credit?

Anonymous — Mon, 11 Jun 2012 20:45:21 GMT

In late 2010 I was 90 days late (I forgot I even had the card and I was throwing out capitol one mail as they kept sending me offers I didn't want, I know very stupid on my part) and on FICO for some reason it says I am 30 days late but I paid off the entire balance of 896 dollars with my paycheck this week and it posted so I don't quite understand. I think I need to run a new FICO score for more updated information.

Re: If I add my son as an authorized user how will it affect his credit?

pizzadude — Mon, 11 Jun 2012 21:06:50 GMT

@Anonymous wrote:
In late 2010 I was 90 days late (I forgot I even had the card and I was throwing out capitol one mail as they kept sending me offers I didn't want, I know very stupid on my part) and on FICO for some reason it says I am 30 days late but I paid off the entire balance of 896 dollars with my paycheck this week and it posted so I don't quite understand. I think I need to run a new FICO score for more updated information.

I would advise to NOT add him as an AU on an account with 90 day lates less than 2 years old.

Re: If I add my son as an authorized user how will it affect his credit?

Anonymous — Mon, 11 Jun 2012 21:07:43 GMT

Also - sorry to double post but if I get the cap one secured card and add him as an AU, will my 2010 problem translate to him since they are both cap one cards? Or will all that happens is what is on that specific card? Sorry I am 54 years old and I don't really know much about this stuff, LOL.

Re: If I add my son as an authorized user how will it affect his credit?

pizzadude — Mon, 11 Jun 2012 21:09:25 GMT

@Anonymous wrote:
Also - sorry to double post but if I get the cap one secured card and add him as an AU, will my 2010 problem translate to him since they are both cap one cards? Or will all that happens is what is on that specific card? Sorry I am 54 years old and I don't really know much about this stuff, LOL.

No - your new account would have its own payment history that is separate and distinct from your other Cap1 account....

Re: If I add my son as an authorized user how will it affect his credit?

Anonymous — Mon, 11 Jun 2012 21:22:41 GMT

OP, when you add someone on as AU to a card, they inherit ONLY the history (both positive and negative) of that particular card, not your credit history.

Assuming you have an old card with only positive history, there are still other things to watch out for. The original card holder may have 10 cards for example with 10k limits. If they add someone with little no credit history as AU, the AU person may have no credit cards or only a couple with 500 limits. So if the AU card is in active use, the AU's utilization will basically swing with the AU card. So ideally, an AU is only added to old with long positive history and is lightly or not used.

Re: If I add my son as an authorized user how will it affect his credit?

Anonymous — Mon, 11 Jun 2012 22:30:06 GMT

Very interesting. Even if I pay off the balance each month on the card that would happen?

Re: If I add my son as an authorized user how will it affect his credit?

aloush11 — Tue, 12 Jun 2012 03:36:53 GMT

Btw if you choose to remove them.. on the CR it should show account terminated, but the history sticks.

Re: If I add my son as an authorized user how will it affect his credit?

Anonymous — Tue, 12 Jun 2012 04:30:04 GMT

@aloush11 wrote:
Btw if you choose to remove them.. on the CR it should show account terminated, but the history sticks.

This really isn't true except with AMEX. Why? AU uses same card number and account info as main card. It won't say account closed unless main card holder closes card. Typically, it disappears from credit report. However it may stay reporting, but that is easily fixed with a dispute with CRA as Not Mine.

Re: If I add my son as an authorized user how will it affect his credit?

Anonymous — Tue, 12 Jun 2012 04:31:49 GMT

@Anonymous wrote:
Very interesting. Even if I pay off the balance each month on the card that would happen?

Do some reading on the forums about reported balances and utilization. Basically most cards report your balance on statement date (the day your cycle closes) and not on due date. As such if you PIF but not before statement is generated, you will have reported balance and therefore potential utilization issues.

Re: If I add my son as an authorized user how will it affect his credit?

Revelate — Tue, 12 Jun 2012 05:28:31 GMT

@Anonymous wrote:
Also - sorry to double post but if I get the cap one secured card and add him as an AU, will my 2010 problem translate to him since they are both cap one cards? Or will all that happens is what is on that specific card? Sorry I am 54 years old and I don't really know much about this stuff, LOL.

Think I'm missing something here, is the intention to help out your son credit wise?

If so, skip the whole AU thing currently. Don't open up a secured card for yourself, open up a secured card for HIM. Do two as a matter a fact. If he's been helping you pay bills, and is 18+, maybe he can do it on his own, but in every form and fashion in your particular situation, his own credit cards >>> any authorized user tricks you can do right now.