topic Re: Hi-Utilization on Oldest account, I'm an AU in Rebuilding Your Credit

Hi-Utilization on Oldest account, I'm an AU

gibeon — Tue, 17 Mar 2015 02:23:45 GMT

Ok. So after a couple painful years of employement difficulties, I'm trying to get my credit back on track. I have a couple of secured cards opened last month (wells and Cap One), and I just got approved for a QS1 from Cap One this weekend (huzzah!).

I'm wondering if I should remove myself as an Authorized User for a high-limit, high-utilization CC, and if doing so will help or hurt.

The dilemma:

I am the authorized user on a card witha $25k limit, but it has had 22k+ balance for quite a while. My credit reports rate my utilization at 90% and include the balance as if it were my own. On the plus side, the account is 29 years old, and (literally) all payments are made on time every month.

The payment and AAoA are good for me, but the utilization is terrible. I just can't figure out if removing the oldest account would be more helpful or detrimental to my scores.

My credit reports had no open accounts (other than as an AU on the above) from early 2011 to June of 2014 when I got an auto loan, and now 3 Bankcards.

Relevant info:
Current Scores - High 500's across the board
Currrent Bank Cards- 2 Secured Cards (1 month old), 1 CapOne QS1 on the way (trying to keep to 10% by paying most pre-statement)

Owe about $6k in ChargeOffs/Collections that I'm hoping I can PFD by December 2015
Have $70K in student loans - $20k live (and just rehabbed!) and $50k off in deferrment until January 2016.

Any tips will be appreciated. I'm leaning towards the utilization hurting me more than the positive history is helping me, but I'm not really sure. I have been paying my car loan perfectly, and will only be using my CC's for the usual expenses (outside of an upcoming vacation), so should have no problem keeping them low in general.

Thank you!

Re: Hi-Utilization on Oldest account, I'm an AU

CH-7-Mission-Accomplished — Tue, 17 Mar 2015 02:31:49 GMT

I would have the primary cardholder call and remove you as an AU. Alternatively you can contact the lender yourself and ask them to "terminate" you. This is how it will show on your credit report.

Usually these A/U accounts will stay on your report and continue to give you the benefit of age for AAofA but it ill report a zero balance and relationship (with you) "terminated."

I have a few of these on my credit reports and they are great. They greatly boost my AAofA and I have no risk from high util or any late payments that could happen.

They could decide to delete the account from yourt reports, but in my experience this hasn't happened.

Re: Hi-Utilization on Oldest account, I'm an AU

Shogun — Tue, 17 Mar 2015 02:54:47 GMT

Since you have no control over the AU account, I'd cut ties with it and rely on your own accounts.

Re: Hi-Utilization on Oldest account, I'm an AU

gibeon — Tue, 17 Mar 2015 15:57:22 GMT

Well, I just removed myself as an AU on that account. I will drop back in to update on how it affects my scores.

Thanks for the advice!

- Dave

Re: Hi-Utilization on Oldest account, I'm an AU

Anonymous — Tue, 17 Mar 2015 16:31:40 GMT

@gibeon wrote:
Ok. So after a couple painful years of employement difficulties, I'm trying to get my credit back on track. I have a couple of secured cards opened last month (wells and Cap One), and I just got approved for a QS1 from Cap One this weekend (huzzah!).

I'm wondering if I should remove myself as an Authorized User for a high-limit, high-utilization CC, and if doing so will help or hurt.

The dilemma:
I am the authorized user on a card witha $25k limit, but it has had 22k+ balance for quite a while. My credit reports rate my utilization at 90% and include the balance as if it were my own. On the plus side, the account is 29 years old, and (literally) all payments are made on time every month.

The payment and AAoA are good for me, but the utilization is terrible. I just can't figure out if removing the oldest account would be more helpful or detrimental to my scores.

My credit reports had no open accounts (other than as an AU on the above) from early 2011 to June of 2014 when I got an auto loan, and now 3 Bankcards.

Relevant info:
Current Scores - High 500's across the board
Currrent Bank Cards- 2 Secured Cards (1 month old), 1 CapOne QS1 on the way (trying to keep to 10% by paying most pre-statement)
Owe about $6k in ChargeOffs/Collections that I'm hoping I can PFD by December 2015
Have $70K in student loans - $20k live (and just rehabbed!) and $50k off in deferrment until January 2016.

Any tips will be appreciated. I'm leaning towards the utilization hurting me more than the positive history is helping me, but I'm not really sure. I have been paying my car loan perfectly, and will only be using my CC's for the usual expenses (outside of an upcoming vacation), so should have no problem keeping them low in general.

Thank you!

AAoA is 10% (or is it 15%?) of your score and UTI% is 30% of your score. Seems like an obvious choice to me.

Re: Hi-Utilization on Oldest account, I'm an AU

slund5499 — Tue, 17 Mar 2015 16:39:52 GMT

I had a similiar issue where I was removed as AU with a high utilization and 5 year history. The account is reporting the Cl with a zero balance and the ownership as "terminated". Balance is reporting as zero. I have 2 additional accoutns as au that I will work on next.

I wonder how long the Cl will continue to report....is this factored in as utilization or is it ignored by FICO?

Re: Hi-Utilization on Oldest account, I'm an AU

gdale6 — Tue, 17 Mar 2015 18:26:06 GMT

@slund5499 wrote:
I had a similiar issue where I was removed as AU with a high utilization and 5 year history. The account is reporting the Cl with a zero balance and the ownership as "terminated". Balance is reporting as zero. I have 2 additional accoutns as au that I will work on next.

I wonder how long the Cl will continue to report....is this factored in as utilization or is it ignored by FICO?

It will report just like any other good closed account, up to 10 years post close. A closed account is not factored into util for Fico

Re: Hi-Utilization on Oldest account, I'm an AU

slund5499 — Tue, 17 Mar 2015 18:42:32 GMT

Why would the CL still report. Equifax report still reporting Cl, AAoA and a zero balance....yet utilization dropped 8%. Ownership of account is reporting as terminated.

Any ideas?

Re: Hi-Utilization on Oldest account, I'm an AU

gdale6 — Tue, 17 Mar 2015 19:08:47 GMT

@slund5499 wrote:
Why would the CL still report. Equifax report still reporting Cl, AAoA and a zero balance....yet utilization dropped 8%. Ownership of account is reporting as terminated.

Any ideas?

The CL is reported in closed (positive) credit card accounts, there is nothing unusual about that. Your utilization is going to drop if there was a balance previously reported on the AU account.

Re: Hi-Utilization on Oldest account, I'm an AU

slund5499 — Tue, 17 Mar 2015 19:11:01 GMT

That explains the utilization drop. The is still reporting in open accounts.....not closed accounts.

Re: Hi-Utilization on Oldest account, I'm an AU

gdale6 — Tue, 17 Mar 2015 19:22:18 GMT

@slund5499 wrote:
That explains the utilization drop. The is still reporting in open accounts.....not closed accounts.

Strange, I have heard and seen this first hand at CK, am pretty sure Fico can make the distinction of it being a closed (terminated relationship) account.

Re: Hi-Utilization on Oldest account, I'm an AU

CH-7-Mission-Accomplished — Tue, 17 Mar 2015 20:01:53 GMT

I was an A/U on a Cap 1 card with my ex. The account has a 28K limit and a 25K balance. It was opened in 1993. I had myself removed as an A/U about 5 years ago.

The account reports on all three of my CRA reports showing a 28K limit, zero balance, perfect payment history and it is utilized in my utilization calculation.

The account relationship says terminated but the account is listed as open. I'm getting the best of all worlds. Can't beat it.

The monthly history stops reporting as of the date of termination but it continues to report as open and zero balance.

Re: Hi-Utilization on Oldest account, I'm an AU

gdale6 — Tue, 17 Mar 2015 19:43:19 GMT

@CH-7-Mission-Accomplished wrote:
I was an A/U on a Cap 1 card with my ex. The account has a 28K limit and a 25K balance. It was opened in 1993. I had myself removed as an A/U about 5 years ago.

The account reports on all three of my CRA reports showing a 28K limit, zero balance, perfect payment history and it is utilized in my utilizatoin calculation.

The account relationship says terminated but the account is listed as open. I'm getting the best of all worlds. Can't beat it.

The monthly history stops reporting as of the date of termination but it continues to report as open and zero balance.

Whoa, a hole in the system. Had no idea that Fico cant make the distinction.

Re: Hi-Utilization on Oldest account, I'm an AU

slund5499 — Tue, 17 Mar 2015 19:48:00 GMT

Ok.....at least I am not crazy. Almost wish I had more AU accounts.

Have 2 more to work on. one is report 8% with a $1000 Cl and the other is reporting 44% with $2500 CL

Maybe I will not touch the smaller AU Cl account.