Adding authorized user to credit card

[Anonymous]

Hi ,

I am and my wife are planning to add the each other to the credit card as an authorized user. I would like to know if this would help us improve our credit score and also increase AAoA . I hold a PNC credit card from 2007 . She holds a Macys card from the same year ( she cancelled her PNC credit card in 2008 , which of course was a big mistake). We are now planning to add her to my PNC card and myself to her Macys card as an authorized user. We have never been late on either card and these cards happens to be our first credit card(oldest account) in US. I would want to know if this would help us increase our AAoA and thereby increase the credit score.

Thanks,

santy83

[Walt_K]

It depends on what else is on your credit report.  If the cards are both older than your AAoA, then it will increase your AAoA.  I'm assuming that you have other newer accounts that are bringing your AAoA down.  In that case, it will likely help, but how much it will help depends on how many other accounts you have.  But, for example, if those cards were the only tradelines that you both had, then your AAoA would be equal to the age of those cards.  Thus, it would increase her AAoA, but it would lower your AAoA.  Even in that circumstance though, you would likely benefit from having a second tradeline.

Calculating AAoA is just the total age of all accounts divided by the number of accounts. 

[Anonymous]

Thanks for your reply . I did not realise the impact of number of accounts on my credit score until I opened couple of CC's recently which dented my score quite a bit. Apart from this I also have a car loan recently . My wife has just this Macys card to show on her history .
Also adding the authorized user willl increase the account count . Am I right?

[Walt_K]

Yes, adding the AU will increase the number of accounts.

The negative score effect that you are seeing right now is not only from the reduction in AAoA but also from the new inquiries.  Most of this negative effect will be gone in 6 months to a year. 

Also, as you move along, so long as you keep accounts open, adding new accounts will not hurt your AAoA as much.  With few old accounts, your average is not heavily weighted.  So adding several new accounts skew it heavily to a smaller number.  As each of those ages, adding a new account later in time will not have as large of a negative effect on your AAoA.  That's because you'll have several old accounts to absorb the effect of adding new accounts.

[Anonymous]

Perfect . Thanks a lot for the detailed explanation .