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Im seeking help from the almighty community to see what my girlfriend should do (I've been trying to raise her credit score for about a year now). She is an authorized user on her Dad's Discover IT card and it is her oldest card which has been open for about 5 years but her Dad has always maxed out this card, ($8,800/9,000) utilization. Should she get off the account? Or would it hurt her c redit score too much taking the hit on her age of accounts?
Seeking help
A card 98% maxed out isn't really doing her any good.
If the card is consistently going to be near maxed out month after month I would have her take herself off her dad's card and make sure the card is no longer reported to the bureaus as well. AAoA is important but showing a card near max utilization is no good either.
@Anonymous wrote:Im seeking help from the almighty community to see what my girlfriend should do (I've been trying to raise her credit score for about a year now). She is an authorized user on her Dad's Discover IT card and it is her oldest card which has been open for about 5 years but her Dad has always maxed out this card, ($8,800/9,000) utilization. Should she get off the account? Or would it hurt her c redit score too much taking the hit on her age of accounts?
Seeking help
To be able to help we will need to know a lot more. Does she have accounts in her name? What are the limits and balances on each account? When were the accounts opened? Does she have any negitive information on her CR?
Unless her dad plans to tackle that balance I still say she should take herself off that account.
@Anonymous wrote:
She is an AU on three of my accounts Chase Freedom ($3,000) and my Amex Everyday ($14,000) and Amex Gold. she was just approved for an Amex Cash magnet for $8,000 probably because of our good history with them through our Everyday and Gold cards. And these accounts were all opened under a year ago. So I feel that her AAoA will be hurt severely. We also don’t carry any balances on any other cards, we pay in full every month
Even if we're optimistic and round all those accounts up to 1 year (12 months), that adds 48 months. The other card is 5 years, so we'll say 60 months. So 108 months total. Once divided by the 5 cards her name is on, her AAoA is actually just under 2 years (21.6 months). It's probably somewhat lower since at least some of the four newer cards are well under a year.
When looked at that way, getting off her dad's card may only knock a year or so off her AAoA. Not having a card that is nearly maxxed may be a bigger help than having the extra year. If not, just get added back in a few months. No loss.
In the fico 8 scoring model, the utilization counts for 35% of your score, where as the age of accounts counts for 15% of the score. So having a card near maxed is hurting way more than than removing that account would.
Aside from that, sounds like she has a good card on her own, plus being th AU on yours, so she is establishing a good solid fundamental score of her own. So if she doesnt need anything big anytime soon, she will be going up the ladder every few months.
Another thing to take into account is that mix of credit counts for 10% of a score, do either of you have a retail card of some sort, or vehicle loans? Remember, cards (revolving) are broken down into 2 categories, retail (such as a store specific card, or amazon store card....not the amazon visa....or something like a macys or kohls card) and the other category is non retail (like her AMEX, or any credit card that can be used anywhere and not just in one store chain).
I wouldnt expect her score to drop by losing her dads discover by more than a couple of points at first, but it will gain points at a much faster pace without it as long as she doesnt carry a balance on her card, and there isnt any balances on any that she is an AU on from your pile either.
Just my 2 cents