Any downsides to adding AU?

[Anonymous]

I've heard a lot of positive things regarding adding someone as an AU in order to give them a boost in their credit score. My main question, as I'm considering this, is are there any downsides?

For example, when I eventually revoke AU, does that show as a closed account and potentially hurt their score? Or if I've had them on for a year or more is it a net gain anyway?

Any side-eye from credit companies upon adding AU soon after getting a card?

I guess part of me is thinking there has to be more of a catch somewhere...

[Anonymous]

With AU accounts, the biggest downside is if you actually give them the card and they run it up. Some people jsut don't give hte AU the card. I haven't personally had any side-eye per se. Your credit history for that card gets reported for them. If you remove them it just shows as a closed account, that person can also contact the CRAs and have the account removed since it wasn't theirs to begin with but doing that will hurt if the history was good on the account. For some banks if you revoke the AU, they may issue you a new card number if the card number was the same for the AU.

[NichelleN]

I have my brother as an AU on three of my oldest accounts. However, I only gave him a physical card for one of them. I get notitfications when he charges and since it's still my account, I keep up with all payments. The good thing is in the last month he's received pre-approvals from 3 banks. We've opened up one in his name only. So far, it has worked well to help him build his credit.

[Open123]

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@Anonymous wrote:

I guess part of me is thinking there has to be more of a catch somewhere...

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No catch, except for the AU benefitting from a good history or suffering from a bad one.  

This rule was created specifically to allow stay at home spouses to build and apply for their own credit.  As such, we can use it to help our family ramp up their CC history.  For instance, I made my niece an AU on my Amex (before they stopped backdating) and several of my oldest Bank TLs a few years ago.  Voila, today, fresh out of college, she has a near 800 Fico score, and her very own Amex TL with a member since date older than she.

[Open123]

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@tamaralig wrote:

With AU accounts, the biggest downside is if you actually give them the card and they run it up. Some people jsut don't give hte AU the card. I haven't personally had any side-eye per se. Your credit history for that card gets reported for them. If you remove them it just shows as a closed account, that person can also contact the CRAs and have the account removed since it wasn't theirs to begin with but doing that will hurt if the history was good on the account. For some banks if you revoke the AU, they may issue you a new card number if the card number was the same for the AU.

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Right, and with Amex cards, you can set them to a $1,000 CL.  However, this limit doesn't apply to international charges.  In other words, once out of the USA, an AU can charge up to whatever amount the Basic cardmember would be approved.

[vanillabean]

Unresolved issues that even the best of dreams can't untangle? 

[Anonymous]

Adding an AU to your account benefits the AU. Make sure you trust the person. That's the best advice I can give you. If you have any reservations, don't do it.

[takeshi74]

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@Anonymous wrote:

I guess part of me is thinking there has to be more of a catch somewhere...

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Not really catches but things to consider.  As metioned above, impact to the orignal cardholder is only if the AU has the card and racks up charges that impact the revolving utilization and ability to pay the card.

As for the AU, not all scoring models and creditors even consider accounts where one is an AU (also depends on situation) so there isn't always a benefit.  Even if the TL is considered for the AU, being an AU isn't guaranteed to be of benefit.  Whether it benefits the AU or not also depends on the state of the TL.  Negative payment history, high revolving utilization, a short age, etc probably won't be of benefit.  In other words, all the usual factors used to evaluate a credit account matter.

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@Anonymous wrote:

For example, when I eventually revoke AU, does that show as a closed account and potentially hurt their score?

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In some cases the TL is removed.  In some cases it is marked as closed or something to that effect.  Whether that hurts or not can vary just as it would for an original cardholder and depends on the person's credit profile and the specifics of the TL.  See also the Closing Credit cards thread linked in the Helpful Threads sticky in this subforum.

In cases where the TL is not considered for the AU there is not impact since the TL does not factor in.  If the TL is considered, the usual factors apply.

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@Anonymous wrote:

Any side-eye from credit companies upon adding AU soon after getting a card?

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Does not matter.  The AU is not responsible.  The original cardholder is.

Side-eye may arise in cases such as when an original cardholder adds an excessive (determined by the creditor) number of AU's or something like that.  There have been threads posted by those who have received scrutiny from AmEx when AU's spend significantly more than the original cardholder, IIRC.