AU Question

[krit]

My adult daughter has almost no credit, save for one four-year-old open installment account for her car with no lates. I added her as an AU to my Discover and AMEX for a total of $16.4 in revolving credit on her reports. The Discover account is 4+ years old and the AMEX is only about a year old. In your opinion, will this help her significantly? 

ETA: These accounts have no lates and are PIF. 

[dragontears]

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@krit wrote:

My adult daughter has almost no credit, save for one four-year-old open installment account for her car with no lates. I added her as an AU to my Discover and AMEX for a total of $16.4 in revolving credit on her reports. The Discover account is 4+ years old and the AMEX is only about a year old. In your opinion, will this help her significantly? 

ETA: These accounts have no lates and are PIF. 

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FYI Amex will show up as a brand new account on her profile if you add her as an AU, doesn't matter how long you have had the account. 

[krit]

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@dragontears wrote:

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FYI Amex will show up as a brand new account on her profile if you add her as an AU, doesn't matter how long you have had the account. 

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dragontears Thank you for that. I didn't know. I added her to AMEX first, then thought Discover might be better for the age. Do you know if the age of my Discover account will be reflected? 

[CYBERSAM]

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@krit wrote:

My adult daughter has almost no credit, save for one four-year-old open installment account for her car with no lates. I added her as an AU to my Discover and AMEX for a total of $16.4 in revolving credit on her reports. The Discover account is 4+ years old and the AMEX is only about a year old. In your opinion, will this help her significantly? 

ETA: These accounts have no lates and are PIF. 

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AMEX not as much, but she should have Fico score around 750ish!

All she needs is 3 CCs of her own to build a nice credit profile.

[krit]

@CYBERSAM Thank you. That's what I'm hoping for. She works hard but is just intimidated by all things credit. 

[SDMarik]

It will report as a new card, but if she has a very thin file, those on time payments each month will boost her score very quickly.

I did this with my Fiancé years ago on 3 separate cards, and it helped her credit tremendously.

[SouthJamaica]

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@krit wrote:

My adult daughter has almost no credit, save for one four-year-old open installment account for her car with no lates. I added her as an AU to my Discover and AMEX for a total of $16.4 in revolving credit on her reports. The Discover account is 4+ years old and the AMEX is only about a year old. In your opinion, will this help her significantly? 

ETA: These accounts have no lates and are PIF. 

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You're not really giving us much to go on.

I would want to know:

her FICO 8 scores

your FICO 8 scores

the typical utilization numbers on your cards

Update: I just noticed that one of your cards is an Amex. Don't even bother adding her to that.  When Amex reports an AU card to the bureaus, it uses the date the AU card was issued as the age of the card, so she will get absolutely nothing out of that.

[Anonymalous]

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@krit wrote:

That's what I'm hoping for. She works hard but is just intimidated by all things credit. 

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Just be aware that many lenders discount any points from an AU card. Not only that, but a credit score is only one factor lenders consider. Whatever her scores are, she's still an almost empty file, and every lender will see that. So she should apply for cards from lenders who are friendly to new and thin files, like Discover. Treat the boost from the AU as a nice bonus that might get her better results, but don't rely on it.

I speak from recent experience. I got my first card less than a year ago, and thanks to an AU card with more than 20 years of perfect history, my starting FICO 8s averaged in the 770s. But I still got denied, until I tempered my expectations.

Also, spread out any applications. Probably not more than one card every 6 months. Credit-seeking looks really bad on thin files, and it's also mechanically penalized (her score will drop a lot from new inquiries and cards).

Fortunately, credit's fairly easy. Get a few cards, pay them off on time, and wait. That's all it takes.

[krit]

@SouthJamaica 

I will need to get her FICOs and report back. My total utilization is 6% with two cards showing a balance. (Taking advantage of 12-month interest free on two large purchases.) Everything else PIF. My FICO 8s are -- EQ: 728, TU: 760, EX: 731. Thanks for the input on the AMEX. 👍 

You're not really giving us much to go on.

I would want to know:

her FICO 8 scores

your FICO 8 scores

the typical utilization numbers on your cards

[SouthJamaica]

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@krit wrote:

@SouthJamaica 

I will need to get her FICOs and report back. My total utilization is 6% with two cards showing a balance. (Taking advantage of 12-month interest free on two large purchases.) Everything else PIF. My FICO 8s are -- EQ: 728, TU: 760, EX: 731. Thanks for the input on the AMEX. 👍 

You're not really giving us much to go on.

I would want to know:

her FICO 8 scores

your FICO 8 scores

the typical utilization numbers on your cards

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Well if your FICO's are significantly higher than hers, I would take a shot at adding her to Discover and seeing what it does to her scores. If it doesn't help, you can always remove her.

If your FICO's aren't significantly higher than hers, then I would skip it.

But as I mentioned Amex is a no-no.