topic Re: Help making a decision in General Credit Topics

Help making a decision

Anonymous — Fri, 14 Feb 2014 21:25:00 GMT

Hey guys,

So I'm trying to decide whether I should be taken off of my parents CC as an authorized user or not. The card I am a user on has a very high balance and utilization, however it is making my average account age much much higher.

Heres an overview of my credit:

AMEX BCP $10,000 limit, zero balance 3 months old

Discover IT $2,500 limit, zero balance 2 years old

Authorized User Chase Freedom $8,000 limit $7,800 balance 22 years old

5-year Auto Loan $6,000 with $5,000 remaining

If I remove myself from the AU card, my utilization with be extremely low since I never carry a balance other than my auto loan. However, my age of account with plummet.

What do you guys think my best move would be?

Thank you for all the help

Re: Help making a decision

Anonymous — Fri, 14 Feb 2014 21:55:10 GMT

I'm no expert on how AUs work.

However, my rule of thumb is that utilization dominates AAoA.

The category that utilization is in has twice the weight of the category that AAoA is in:

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

Re: Help making a decision

Anonymous — Fri, 14 Feb 2014 22:01:28 GMT

@Anonymous wrote:
I'm no expert on how AUs work.

However, my rule of thumb is that utilization dominates AAoA.

The category that utilization is in has twice the weight of the category that AAoA is in:

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

Yeah that was my main reasoning behind doing this. I'm just not sure if the massive drop in AAoA will outweigh the ~50% drop in utilization.

Re: Help making a decision

Anonymous — Fri, 14 Feb 2014 22:28:22 GMT

@Anonymous wrote:
@Anonymous wrote:
I'm no expert on how AUs work.

However, my rule of thumb is that utilization dominates AAoA.

The category that utilization is in has twice the weight of the category that AAoA is in:

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

Yeah that was my main reasoning behind doing this. I'm just not sure if the massive drop in AAoA will outweigh the ~50% drop in utilization.

If it was me I think I'd bite the bullet.

Being associated with high utilization will hurt you in the long term.

Re: Help making a decision

blondy250 — Fri, 14 Feb 2014 22:58:00 GMT

AAoa is a small component, I'd remove myself as an AU you're ready to be on your own.

Re: Help making a decision

thom02099 — Sat, 15 Feb 2014 00:24:06 GMT

In agreement with the others...utilisation is more important than AAoA.

Also keep in mind that, if for some obscure reason, your parents do something stoopid with that shared account, that will impact you as well. Those high balances could turn in to a 30-, 60-, 90- day late somewhere along the line if they should get in over their heads. Based on what you said, about you never carrying a balance and PIF, seems like you're in a better position than they are, and they could learn a few things from their smart offspring!!!

Re: Help making a decision

Anonymous — Sat, 15 Feb 2014 01:33:39 GMT

Alright well thanks everyone I think I'll go ahead and remove myself from it. I'm anxious to see how my score reacts. I've been so close to the 800 mark but unable to breech it.

Thanks again!

Re: Help making a decision

RobertEG — Sat, 15 Feb 2014 08:05:19 GMT

In addition....

While you have the account of another reported to your CR, if a potential creditor does a manual review of your CR, it can hurt.

It tells them that your score is not based only on your own credit history. Having no way to "back out" the effect of that account on your scoring, it could make the use of your score itself questionable in any determination. They know it does not reflect your own personal risk.

Great for rebuilding where the creitor doesnt do a manual review, but can lead to potential problems when you are moving up in your quest for better or higher credit.

Re: Help making a decision

Anonymous — Sun, 16 Feb 2014 16:29:59 GMT

@Anonymous wrote:
Alright well thanks everyone I think I'll go ahead and remove myself from it. I'm anxious to see how my score reacts. I've been so close to the 800 mark but unable to breech it.

Thanks again!

Also, make sure you let one of your own cards report a 1-9% balance of that one card's limit (and then you can pif before the statement due date.) for maximum scoring.

Re: Help making a decision

takeshi74 — Mon, 17 Feb 2014 15:38:43 GMT

@Anonymous wrote:
Yeah that was my main reasoning behind doing this. I'm just not sure if the massive drop in AAoA will outweigh the ~50% drop in utilization.

Again, refer to the chart above. 50% change in utilzation is very significant. Consider that 30% is the recommended max.