Dropping a credit card

Anonymous — Mon, 13 Sep 2010 23:54:06 GMT

Hi,

I have a question which I hope someone will answer.

A relative added my name to a credit card account and had a (second) card issued to me on the same account. However, that account is maxed out and drags my score down. I am not the primary on that account.

If I have my name removed from the account and cancel my card, should that improve my score? Or is there some side effect which would cause this to have no effect, or some bad effect?

Thanks in advance for helping.

Regards

Re: Dropping a credit card

llecs — Tue, 14 Sep 2010 01:54:19 GMT

Welcome to the forums!

Common Abbreviations

Credit Scoring 101 - great for knowing what is in your credit score and to see how your score is impacted.

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There are 4 things to keep in mind when considering whether or not to remove yourself as an AU: payment history, length of history, mix of credit, and CC utilization.

Payment history - if the card has any lates, then it is usually a good idea not to be an AU on the card.

Length of history - Don't underestimate the power of the length of history. Look at the age of this account (from the open date to today) and compare that to your overall average age of accounts (AAoA). AAoA is the average age of all of your open and closed OC accounts (e.g. loans, CCs, etc.). AAoA is also usually listed on your FICO report. If the age of this AU CC account is younger than your AAoA, then removing it would help your AAoA and that can bump your scores by itself. However, if this AU account is one of your oldest accounts, and removing it causes your AAoA to drop, then you could actually lose points.

Mix of credit - your credit mix is very important. Generally, you probably would want 3 or more open CCs reporting. If removing this TL from your CRs drops that number to below 3, then you could see a score drop. If you have other open CCs outside of this, then don't worry about the mix.

Utilization - calculate your CC utilization before it is removed and again after it is removed. If your overall utilization drops, then you could see a score gain. If it increases, then your score can drop.

Your score change is a YMMV thing. If there's no downside, then remove yourself right away (you can actually dispute as "not mine" since you are not the account owner and it'll fall right off). If there's a chance to lose points, then I would give the most weight to the length of history, then to utilization followed by mix. As an example, my DW was an AU on her dad's Citi account from back in her college days. She never removed herself prior to finding this website 3 yrs ago. Her overall utilization was at 95% because that AU card was maxed out and the limit trumped her other CLs. The best she could do, if she paid her CCs to $0, would be to have an util of 90%. Thinking that it was better to remove her, and having a great mix of credit, we disputed and it was deleted within days. Her FICO scores dropped an average of 20 points on each CRA. Why? Because her AAoA with that TL was 7 years. Without it, 3 years. It was also her oldest revolving TL and maybe even the oldest TL reporting. Her util went down to 20% I think, but despite that, the damage of the loss in history was greater than the damage of the utilization.

Re: Dropping a credit card

Anonymous — Tue, 14 Sep 2010 02:25:18 GMT

Thanks for the help.

It is certainly more complicated that I thought.

Regards

Re: Dropping a credit card

llecs — Tue, 14 Sep 2010 02:26:47 GMT

Remember, if removing it results in a loss, then you can always ask for it to be re-added.

topic Re: Dropping a credit card in Understanding FICO® Scoring

Dropping a credit card

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Re: Dropping a credit card