topic Re: Got authorized on my dad's Amex, what to expect? in Rebuilding Your Credit

Got authorized on my dad's Amex, what to expect?

Amerabian — Thu, 01 Jan 2015 10:04:40 GMT

Hello there,

I was just added as an authorized user to my dad's Amex account and getting my card in about 7 days.

He's been an Amex member since 1990.

I know has strong credit/history (probably 790+) with a nice collection of cards from Amex, Chase cards, Citi, etc...

I was wondering, is this going to help my credit score?

Either way, this is a good start to 2015 for me

Edit: Seems like it DOES help by adding the history of that account to the authorized user..

What sort of improvement should I expect? I AM EXCITED!

I've read somewhere that A/U's get their own Amex card number and linked to their own bank account.. I love this!

I'm going to be "Mr. Member Since 2015"

Re: Got authorized on my dad's Amex, what to expect?

chally — Thu, 01 Jan 2015 10:13:16 GMT

This is a good way to get your foot in the door with AMEX and set yourself up for a good relationship with them, however your dad's 1990 member since date will not reflect on your CR as you have surmised. I don't see how any of the account's history will be a benefit to you per se. (aside from being added as AU) Nonetheless, congrats Member Since 2015!

Re: Got authorized on my dad's Amex, what to expect?

Amerabian — Thu, 01 Jan 2015 10:20:02 GMT

I don't mind being a member since "2015".. I've just realized that I should've done this earlier, coulda been member since 2014 and gained a year..

Eitherway, I'm overwhelmed as it is..

Still trying to figure out what the effect will be on credit score.

Whether I will have the original card's history or not..

When I will qualify to get my own Amex..

Whether and when I should apply for more credit cards.. and which.. (By end of year)

Re: Got authorized on my dad's Amex, what to expect?

chally — Thu, 01 Jan 2015 10:30:49 GMT

Effect on credit score: Score will prob drop a few points taking in consideration a new TL, hence a drop in AAoA.

The original card's history is your dad's. Your history is your own, his will not reflect on you one way or another.

Re: Got authorized on my dad's Amex, what to expect?

Amerabian — Thu, 01 Jan 2015 10:54:00 GMT

Hmm.. I understand

If I got a card linked to one of his old Visa cards, would that help with the score?

If so, considering I'm getting the Amex now. When can another A/U account be utilized? (for raising CS)

Re: Got authorized on my dad's Amex, what to expect?

TRC_WA — Thu, 01 Jan 2015 16:02:46 GMT

FICO 08 doesn't put much stock into AU accounts for credit scoring...

If it were that easy everyone would piggyback someone with great credit.

Re: Got authorized on my dad's Amex, what to expect?

cartwrna — Thu, 01 Jan 2015 16:22:41 GMT

Company's do backdate AU cards, not sure if Amex does but a search will tell you. It's not YOUR history as Chally indicated, since you have no obligation to pay this account in any way they don't track your history to your report but instead the card OWNERS history, which in this case is your father. I added my wife as AU to my Cap 1 cards and it backdated since open date. Payment history and all :-)

Re: Got authorized on my dad's Amex, what to expect?

cartwrna — Thu, 01 Jan 2015 16:24:08 GMT

That is also the reason that if a card your AU on gets into trouble ie: late payments, high balances, etc you can just dispute and have it removed from your report in a heart beat, or a simple call to creditor can have it removed.

Re: Got authorized on my dad's Amex, what to expect?

jeffeverde — Thu, 01 Jan 2015 16:28:06 GMT

I'm not sure what you mean by "linked to their own bank account". As the name implies, you are simply someone who's authorized to make charges on the primary account holders account. Your Dad could take the additional step of authorizing you to manage the account, but that is not reflected on your credit reports in any way.

As for impact on your credit reports --- you will see no FICO score improvement under the new FICO 08 scoring model. With the exception of spouses, the FICO 08 model pretty much ignores all AU accounts. The previous FICO 04 model treated AU accounts as any other account, and being added as an AU gave you the full history of a seasoned account.

The big benefit of being made an AU on an AmEx account, is that if you open an AmEx in your own name in the future, AmEx considers you a "Member since" going back to this AU account, and this future new account will be reported as having been opened on your "member since" date. This can have tremendous future credit score benefit for a young person. Say your father added you to his AmEx when you were 15, and at 25 you apply for your own AmEx. This brand new account will reported as being 10 years old, giving a nice bump to your average age of accounts.

Re: Got authorized on my dad's Amex, what to expect?

jeffeverde — Thu, 01 Jan 2015 17:00:29 GMT

"Company's do backdate AU cards, not sure if Amex does. . ."

AmEx will backdate all of your own accounts to your original "member since" date. If your first AmEx experience is as an AU, the date that you became an AU establishes your "member since" date. But AU's do not inherit the "member since" date of the account they were made an AU on. Until recently, AmEx did backdate AU's to the original account date - creating a scenario where a child (or grand child!) of an AmEx member, could inherit an account history preceeding their own birth by many years.

Re: Got authorized on my dad's Amex, what to expect?

MarineVietVet — Wed, 07 Jan 2015 19:55:14 GMT

@jeffeverde wrote:

I'm not sure what you mean by "linked to their own bank account". As the name implies, you are simply someone who's authorized to make charges on the primary account holders account. Your Dad could take the additional step of authorizing you to manage the account, but that is not reflected on your credit reports in any way.

As for impact on your credit reports --- you will see no FICO score improvement under the new FICO 08 scoring model. With the exception of spouses, the FICO 08 model pretty much ignores all AU accounts. The previous FICO 04 model treated AU accounts as any other account, and being added as an AU gave you the full history of a seasoned account.

The big benefit of being made an AU on an AmEx account, is that if you open an AmEx in your own name in the future, AmEx considers you a "Member since" going back to this AU account, and this future new account will be reported as having been opened on your "member since" date. This can have tremendous future credit score benefit for a young person. Say your father added you to his AmEx when you were 15, and at 25 you apply for your own AmEx. This brand new account will reported as being 10 years old, giving a nice bump to your average age of accounts.

Not true.

AU's are still counted for scoring under FICO 08 although the impact is not as great as older scoring models.

Re: Got authorized on my dad's Amex, what to expect?

RobertEG — Wed, 07 Jan 2015 20:07:03 GMT

Adding an AU can help your score, but a creditor might then give less credence to your score, as it no longer provides them a risk analysis of your personal history.

That is the primary purpose of a credit score.

A credit score that is based in part on the history of another looses some of its value to a creditor, and they have no way to back out the AU account to obtain a score that represents only you.

There aint no free......

Re: Got authorized on my dad's Amex, what to expect?

Anonymous — Wed, 07 Jan 2015 20:22:34 GMT

....lunch.