topic Re: Authorized User to lower Utilization in General Credit Topics

Authorized User to lower Utilization

bonddiva07 — Thu, 03 May 2007 09:19:44 GMT

Okay, Right now I have a Utilization level overall of about 80-90% on all my avaiable credit. If I am added as an authorized user to someones account that has a very high limit and a zero balance, where that utilization level is basically 0, is this going to give a significant boost in score or only a small one? By doing this I will be going from 80/90% to like 23% utilization level literally overnight. Any thoughts?

Re: Authorized User to lower Utilization

Tuscani — Fri, 04 May 2007 23:27:36 GMT

Do it! This is a common reason to use an AU. Just make sure they have no derog info on the account such as late payments.. the bad comes with the good.

Re: Authorized User to lower Utilization

smallfry — Sat, 05 May 2007 00:16:56 GMT

I think this whole Authorized User business makes the whole credit scoring game a sham. How does it prove that I can handle credit if I basically just buy someone else's credit?

Re: Authorized User to lower Utilization

Anonymous — Sat, 05 May 2007 01:14:42 GMT

@smallfry wrote:
I think this whole Authorized User business makes the whole credit scoring game a sham. How does it prove that I can handle credit if I basically just buy someone else's credit?

Perhaps. Then again, the collection agencies don't hesitate to game the system any way they can, so turnabout is fair play.

But my comment to the OP is that utilization rates that high usually indicate an inability to live within one's means. So have yourself added as an AU to an older tradeline if you wish, but you need to address the imbalances that led up to you charging your cards up to 80-90% in the first place. Otherwise, you're just treating the symptoms, not the disease.

Re: Authorized User to lower Utilization

Tuscani — Sat, 05 May 2007 02:23:37 GMT

Plus, having a credit worthy person add you as an AU is not a golden ticket to perfect credit. It is simply a stepping stone for building your own scores.

Re: Authorized User to lower Utilization

Anonymous — Sat, 05 May 2007 13:29:42 GMT

I think this whole Authorized User business makes the whole credit scoring game a sham. How does it prove that I can handle credit if I basically just buy someone else's credit?

For someone in my situation, it would be a godsend! My history is good - all payments on time. However, I only have 2 TL's reporting and both for short periods so my score is still not where I need it to be to get a home. My little one is getting older by the minute and I'm sure not getting any younger. I need to get a home soon to have it paid off by retirement. I can't afford to wait one or two years to get all of my scores to 720 and I certainly can't pay more money (or can't see myself doing it) because of a higher interest rate. I'm definitely considering the AU option, in the short term only, for this one purpose alone. It's not a "sham" for me because what is on my CR's shows that I can responsibly make on time payments. I can't help it that the system takes eons to reward good behavior.

Re: Authorized User to lower Utilization

Anonymous — Mon, 07 May 2007 19:22:25 GMT

I debated this for a long time. It just sounded too good to be true, too easy. Plus, I was skeptical about pulling someone's credit into my own file that I had no control over. But, I bit the bullet and gave it a try. Added a seasoned trade about 4 years old, $16K limit, under 20% util, never a late. My EX bumped 29 points overnight. Still waiting for the other 2 to report. I agree with a previous poster. It's kind of a game, and both sides don't always play fair, so go for it. Just be SURE you know what you're adding, know all details of the AU host account so you can determine if it's a good tradeline for your file.

Re: Authorized User to lower Utilization

Anonymous — Mon, 07 May 2007 19:27:29 GMT

Though the AU status may increase you scores you will still have heavy hits from the maxed out cards you are showing on your report. Anything in the 90% range is considered maxed out and will ding you heavily, anything over 50% will hit though not as hard. The idea is to keep ALL balances below 30% 10% if you can

Re: Authorized User to lower Utilization

Anonymous — Mon, 07 May 2007 19:28:18 GMT

I wanted to add that NewWorldMan and Tuscani make excellent points. Treat the symptom first. If your own tradelines are way up on utilization, you need to address that before you add AU accounts. AU accounts are not a band-aid for your own ill behavior. They are, like Tuscani said, a stepping stone. You definitely don't want to secure new credit with your newly minted scores if you can't handle the debt you have now. In my case, I had paid off and paid down for a few years. Then I added the AU account.

Message Edited by devhip on 05-07-2007 12:28 PM

Re: Authorized User to lower Utilization

Anonymous — Mon, 07 May 2007 19:44:52 GMT

HouseHunter wrote:
I think this whole Authorized User business makes the whole credit scoring game a sham. How does it prove that I can handle credit if I basically just buy someone else's credit?
For someone in my situation, it would be a godsend! My history is good - all payments on time. However, I only have 2 TL's reporting and both for short periods so my score is still not where I need it to be to get a home. My little one is getting older by the minute and I'm sure not getting any younger. I need to get a home soon to have it paid off by retirement. I can't afford to wait one or two years to get all of my scores to 720 and I certainly can't pay more money (or can't see myself doing it) because of a higher interest rate. I'm definitely considering the AU option, in the short term only, for this one purpose alone. It's not a "sham" for me because what is on my CR's shows that I can responsibly make on time payments. I can't help it that the system takes eons to reward good behavior.

I understand your plight, although from the bank's point of view, they are loaning you money for 30 years. That's why they look for a long history.

You could buy the house now, and then when your scores improve, you could refinance at a better rate.

Re: Authorized User to lower Utilization

Cory — Mon, 07 May 2007 20:50:50 GMT

Is this really true? I would think that this is also risky. And my reasons are because, if you add someone as a authorized user and they max out the card, they might not pay it back. You can't trust everyone.

Cory

Re: Authorized User to lower Utilization

Tuscani — Mon, 07 May 2007 20:57:46 GMT

Cory wrote:
Is this really true? I would think that this is also risky. And my reasons are because, if you add someone as a authorized user and they max out the card, they might not pay it back. You can't trust everyone.

Cory

Don't give them a card.

Re: Authorized User to lower Utilization

Cory — Mon, 07 May 2007 21:36:31 GMT

I know that's right. This credit thing has got my bent out of shape. I'm sick of it all.

Cory

Re: Authorized User to lower Utilization

Anonymous — Mon, 07 May 2007 21:51:08 GMT

Question: Does it work both ways with the authorized user stuff. What if you were added to an account as an AU, but the primary cardholder decided to go ahead and use the card to like 50% utilization. Would their utilization ding you even though you're an AU?

Re: Authorized User to lower Utilization

Anonymous — Mon, 07 May 2007 21:58:31 GMT

dazednconfused wrote:
Question: Does it work both ways with the authorized user stuff. What if you were added to an account as an AU, but the primary cardholder decided to go ahead and use the card to like 50% utilization. Would their utilization ding you even though you're an AU?

In a word yes. When added as an AU you have that account's history added to your account as well as any future history as long as you are AU. If they maxed the card you would take a hit. With AU you have to take the good with the bad. The only reason I reccommend AU is if it is on an account with a person whose history you absolutely trust plus the fact that it can be rather easily removed unlike a co-app that you are actualy responsible for paying if the primary defaults