Finally Leaving the nest approval odds

[Anonymous]

Hello I hope all is well. I’m looking to establish my own credit and need any advice. My parents added me as an authorized user to a cc that is 85% utilized. No missed payments. 10 years. I have a student loan <1800 with no late monthly payments. 9 years I need to apply for credit myself and wanted to know if it would be better to remove myself as an authorized user from the highly utilized cc before applying for a cc on my own? And which cards would I have a chance to get approved  (As of now thinking of applying for a Bofa cash rewards because I have an account there) I recognize their credit history is helping but is the high util hurting more. My Fico  is 710 ef 665  tu 640. I am assuming my tu and ef are low because of the high util. Thanks for your input.  

[Anonymous]

Are you currently a student with new student loans, or are they in repayment? If they are in repayment and you are actively paying on it, that should be enough to get you a starter card credit-wise. I am not sure how much effect a student loan has that has not entered repayment yet, other than DTI ratio. The high CC utilization will definitely drag your score down a lot.

[Anonymous]

Thank you for your reply and insight! I am not a current student. The loan is in repayment. No missed payment. I am leaning towards removing myself as an authorized user and applying once that action has been reported and reflected on my credit report. 

[UncleB]

Hi @Anonymous, I've merged your two threads into one.  Please refrain from cross posting in the future; it's confusing to follow and is against our guidelines here.

--UB

[K-in-Boston]

If you have no other accounts besides the student loan, that’s a tough call. Extremely high utilization will certainly kill a credit score but I’m not certain that being removed will actually improve the score, and of course that could take some time to disappear. Where are you getting your credit scores? You mention FICO, (assuming ef is) Equifax and TransUnion which leads me to believe those last two may be from Credit Karma which does not give FICO scores, but VantageScore 3.0 scores that are not used by any major lenders. You have multiple FICO scores. The most common would be EQ 08, EX 08, and TU 08 which are FICO 08 scores based on the data in your Equifax, Experian and TransUnion files. Have you tried any of the prequalification sites from American Express, Discover, Chase, Citi, etc.? You can also get a free Experian FICO 08 score from Discover at creditscorecard.com

Edit: seeing the merged post, I would certainly suggest logging into your Bank of America account to see what comes up in their prequalification tool!

[jdbkiang]

Went through a similar process a couple years ago. AU on cards with history but high utilization (12K, maxed out, 4K 85%, and two smaller cards with more than 60%). I didn’t have any loans though.

Had NO idea how credit worked, cold app’ed for Best Buy cc and sears cc. Approved for sears, denied for Best Buy. But, just 3 months later, with the AU on those cards, found out I was pre-approved for CSR, applied for CSR and CFU on the same day and was approved for both.

I’d recommend checking pre-quals as your first step.

[kerplunk]

If OP gets removed as an AU, what does his credit look like? Will that high utilization stay on his credit report? Will it disappear as if it never happened? Please excuse my ignorance when it comes to AUs.

[Anonymous]

If the OP removes the AU account, he has no revolving credit and therefore has no utilization.

Having your aggregate utilization at 85% and your individual card utilization at 85% is probably holding back the OPs scores 100 points.  Getting rid of all revolvers and having no revolvers may be a 50 point hit.  Therefore IMO if he were to drop the AU account, his net gain would be 50 points over whatever his current FICO score(s) are.  It's very important that he look at FICO scores here and nothing VS 3.0. 

I'd suggest the OP hit up creditscore.com and grab a free EX FICO 8 score.  Then drop the AU account, find out when it reports and once it reports thus being removed from his CR he can hit up creditscorecard.com and get another free EX FICO 8 score.  Observe the scoring differential between the two scores to gauge the impact of the AU account.  Being added back on as an AU is always an option.

Are there any other options here with respect to the AU situation?  Is paying down that 85% utilization an option?  Is there a different account with low utilization that you can be added to an an AU?

[jdbkiang]

If OP is pre-qualified and doesn't want to wait for scores to report after AU removal etc, it could be worth straight up applying, and if denied, recon and explain that account is AU and OP isn't financially responsible for the card at all. This would allow an application to go through both with and without the AU card. 

But honestly, if OP applies for a lower tier card that's already shown pre-qualification, I'd say there's a pretty good shot at approval as is. 

[Anonymous]

Hi @UncleB,
I apologize for that. Newbie. Thanks for your help