topic Closing authorized user account - will it hurt my credit? in Understanding FICO® Scoring

Closing authorized user account - will it hurt my credit?

Schmoopy — Wed, 24 Oct 2018 01:54:05 GMT

Hey,

I started building my credit recenlty (average credit age is 1Y4M) and my first card was a secured Wells Fargo card.

After that I issued a card as an authorized user for someone else's Amex gold card.

I made all payments on time and Amex approved me for my own Gold Amex later on (pre approved spedning limit is $50K).

Amex raised the annual fee from $95 to $195 so I'm thinking to close the card as an authorized user - so I don't pay $195 twice.

Will it hurt my credit in any way?

It's a charge card with no credit limit just a pre-approved spedning limit. It has $70K limit on it. So I assume closing it won't affect the credit limit or utilization %. Will it affect anything else?

I thought it was ok to keep for $95 for the potential spending but now that my card has $50K I don't think I'll need more than that.. thoughts? Thanks

Re: Closing authorized user account - will it hurt my credit?

Anonymous — Wed, 24 Oct 2018 03:10:01 GMT

No it will not negatively affect your profile if you drop the AU, since Amex no longer backdates, your profile probably took a new account/AoYA resetting hit when you first added it.

Re: Closing authorized user account - will it hurt my credit?

Schmoopy — Wed, 24 Oct 2018 05:46:12 GMT

Ok, good to know. thanks.

What is "Amex no longer backdates"? What does that mean?

BTW - isn't adding an AU increase your credit? I thought it does, at least it increased mine (in this case and with BofA cards I was added as AU).

Thanks

Re: Closing authorized user account - will it hurt my credit?

Anonymous — Wed, 24 Oct 2018 06:02:33 GMT

One of the biggest reasons to be added as an AU is the age of the account to help boost your own AAoA (average age of accounts) and AoOA (age of oldest account), Amex is one of the few lenders that does not backdate (adopt the age of the account) so the account is reported to your profile as a brand new account with an age of 0 months, this ends up defeating the purpose of AU and actually drags down your AAoA and resets your AoYA (age of youngest account) to 0. This is why one should choose lenders other than Amex when it comes to AUs.

Re: Closing authorized user account - will it hurt my credit?

Schmoopy — Wed, 24 Oct 2018 06:01:14 GMT

@Anonymous wrote:
One of the biggest reason to be added as an AU is the age of the account to help boost your own AAoA (average age of accounts) and AoOA (age of oldest account), Amex is one of the few lenders that does not backdate (adopt the age of the account) so the account is reported to your profile as a brand new account with an age of 0 months, this ends up defeating the purpose of AU and actually drags down your AAoA and resets your AoYA (age of youngest account) to 0. This is why one should choose lenders other than Amex when it comes to AUs.

Got it! Interesting. Good to know. And dropping it, it is

Re: Closing authorized user account - will it hurt my credit?

FlaDude — Thu, 25 Oct 2018 17:30:33 GMT

@Anonymous wrote:
This is why one should choose lenders other than Amex when it comes to AUs.

I didn't realize that, I added my daughter to my Blue account as an AU a couple of months ago and see exactly that when I check on CK. OTOH, she is an AU on my Gold account and it shows the opening date of 1994, which is when I opened the account. I don't remember exactly when I added her to that, probably around 8-10 years ago. Maybe they used to handle it differently.

Since the Blue account has a 32k limit with 1% utilization (soon to be PIF) it is probably still something I would do even knowing this. Between adding the Blue and removing her as an AU from another account that was close to maxed her FICO jumped 30 points and Vantage close to 50. Her only card has a 4k limit and around 70% util.

Re: Closing authorized user account - will it hurt my credit?

Anonymous — Thu, 25 Oct 2018 19:00:19 GMT

@FlaDude wrote:
@Anonymous wrote:
This is why one should choose lenders other than Amex when it comes to AUs.
I didn't realize that, I added my daughter to my Blue account as an AU a couple of months ago and see exactly that when I check on CK. OTOH, she is an AU on my Gold account and it shows the opening date of 1994, which is when I opened the account. I don't remember exactly when I added her to that, probably around 8-10 years ago. Maybe they used to handle it differently.

Since the Blue account has a 32k limit with 1% utilization (soon to be PIF) it is probably still something I would do even knowing this. Between adding the Blue and removing her as an AU from another account that was close to maxed her FICO jumped 30 points and Vantage close to 50. Her only card has a 4k limit and around 70% util.

Amex used to backdate, I don't know exactly when they stopped but it's probably after you added her on the Gold Card. Large limit to help with UTI like in your case is another reason for AUs, for OP though, the card is a charge card so it does nothing for UTI.

Re: Closing authorized user account - will it hurt my credit?

FlaDude — Thu, 25 Oct 2018 19:23:15 GMT

@Anonymous Amex used to backdate, I don't know exactly when they stopped but it's probably after you added her on the Gold Card. Large limit to help with UTI like in your case is another reason for AUs, for OP though, the card is a charge card so it does nothing for UTI.

Could charge cards be detrimental to UTI since they show zero CL but the balances are added to the credit card balances?

Re: Closing authorized user account - will it hurt my credit?

Anonymous — Thu, 25 Oct 2018 22:03:59 GMT

No, charge cards do not factor into your UTI calculations, even for primary card holder.

Re: Closing authorized user account - will it hurt my credit?

FlaDude — Thu, 25 Oct 2018 19:40:38 GMT

Thanks, good to know.

Re: Closing authorized user account - will it hurt my credit?

Anonymous — Thu, 25 Oct 2018 19:43:47 GMT

No problem.

Will closing down AU accounts hurt my credit score?

Schmoopy — Thu, 25 Oct 2018 22:02:23 GMT

Hey,

So my credit history is pretty new. First credit card I've ever issued (which was secured at the time) was during 11/2016.

Now I have 5 credit cards (Wells Platinum/BofA mastercard/Credit One/Target and Amex Gold) with an overall CL of $6900 plus $50,000 Amex pre-spending limit. I use my Amex the most each month and pay it off. Average Credit Age is 1Y4M.

I have also 4 credit cards as an AU. One Amex Gold (with pre-spedning limit of $70K) and 3 BofA cards with CL of $60K overall.

Currently my utilization rate is 6%.

I intend to close my Amex AU since as explained yesterday - will have no negative impact on my credit.

About BofA cards they are def calculated in my CL and if I close them my utilization ratio will go up for sure, am I right?

I assume it'll also effect my average credit age since the cards I'm an AU of are older than my average.

Thoughts?

Re: Will closing down AU accounts hurt my credit score?

Remedios — Thu, 25 Oct 2018 21:48:30 GMT

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Closing-authorized-user-account-will-it-hurt-my-credit/td-p/5390731

Re: Will closing down AU accounts hurt my credit score?

Schmoopy — Thu, 25 Oct 2018 22:00:18 GMT

Sorry, I just had another question re; BofA AU accounts, should've continued the same thread.

Re: Will closing down AU accounts hurt my credit score?

Remedios — Thu, 25 Oct 2018 23:52:07 GMT

There is nothing to be sorry about. Hopefully one of the mods will merge your threads and you'll get your answers

Re: Will closing down AU accounts hurt my credit score?

Remedios — Fri, 26 Oct 2018 14:56:20 GMT

@Schmoopy wrote:
Hey,

So my credit history is pretty new. First credit card I've ever issued (which was secured at the time) was during 11/2016.
Now I have 5 credit cards (Wells Platinum/BofA mastercard/Credit One/Target and Amex Gold) with an overall CL of $6900 plus $50,000 Amex pre-spending limit. I use my Amex the most each month and pay it off. Average Credit Age is 1Y4M.

I have also 4 credit cards as an AU. One Amex Gold (with pre-spedning limit of $70K) and 3 BofA cards with CL of $60K overall.
Currently my utilization rate is 6%.

I intend to close my Amex AU since as explained yesterday - will have no negative impact on my credit.
About BofA cards they are def calculated in my CL and if I close them my utilization ratio will go up for sure, am I right?
I assume it'll also effect my average credit age since the cards I'm an AU of are older than my average.

Thoughts?

The AU cards can stay on your report for up to 10 years and continue contributing to your credit age.

As far as utilization, that would depend on balances on the cards you intend to keep

It's impossible to answer your question without listing all the cards with their individual limits and balances.