Authorized User and FICO score

[krmurrayjr10]

I'm trying to make a decision and need some advice.

Almost exactly 20 years ago, when I still lived at home, my father added me as an AU on his Sears credit card so I could pay for repairs to my car. He'a almost certainly forgotten about it, but apparently still has the same account, because it's still showing on my credit report.

I can't decide whether to call and ask to have myself removed. I've been rebuilding my own credit for the past couple years and am now in the low- to mid-600s.

My reasons for wanting to separate myself from it are: not wanting to be attached to my father's finances in any way, and not wanting to be attached to it in the unlikely event that something goes wrong, which admittedly is unlikely because my father is quite responsible. He did have a 30-day late a few years back on it, which is unusual for him.

At the same time, the card is by far the oldest account on my report and also the highest credit limit and has almost no utilization, so as long as it's on there and he doesn't make any mistakes, it's probably still helping me out (aside from the late payment).

I guess I'm concerned that having this thing showing as available to me could affect my ability to obtain other credit in the future. What do you think?

[Anonymous]

I think you should incoporate dropping the card into your rebuilding plan.  The plan will take into account several things, one of them being any major credit needs that might be on the horizon.  For example, if you were planning to buy a car in six months, then I'd keep the AU account until that is finished.  That's just an example.  But you should have a plan for what you are trying to achieve and the various milestones and actions you need to take to achieve them, with dropping that AU account (and its associated late) as part of your plan.

You observe that this card has....

"the highest credit limit [of all my revolving accounts] and has almost no utilization, so as long as it's on there and he doesn't make any mistakes, it's probably still helping me out..."

I will say that when someone identifies help with utilization as a reason to have some particular AU account, he needs to view that as a warning sign that he is probably carrying a lot of debt and paying interest on it.  Even if you have only one credit card of your own with a small limit ($300 say) you could easily use that card to buy $2000 worth of stuff each month and still have a utilization of 2-3%.  All you have to do is pay your card down to a small amount before the statement cuts.  Any serious rebuilding plan needs to center on clearing yourself of all CC debt -- the plan may have other stuff in it but it should have at least that.

On top of it, there's a lot of FICO models where FICO does not count AU accounts as part of your utilization.  So it's likely giving you no help there anyway.

Where it sounds like it may be giving you some substantial help is in the Age category.

I hope this gives you some ways to think about the choice to remove and when.  Good luck at making the best choice for you.

[RobertEG]

Whenever you have an AU account included in your scoring, it automatically means that the score produced does not represent evaluation of only your own history.

If a potential creditor does a manual review and notices that you have an AU, they have no way to produce a score that represents only your own credit risk.

AUs are good for building, in that many creditors do not do a detailed manual review for lower-end cards, and rely on the score without consideration of whether it includes an AU.  However, as you move up the ladder and seek higher levels of credit, the chances of a manual review increase.

Some mortgage lendors will, for example, require removal of AUs as part of their underwriting, wishing to see your score based only on your own credit history.

Once you are past the rebuilding stage, I would consider ditching AU accounts, but much depends upon the type of credit you will be seeking and the type of review a creditor will do.

[takeshi74]

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@krmurrayjr10 wrote:
My reasons for wanting to separate myself from it are: not wanting to be attached to my father's finances in any way, and not wanting to be attached to it in the unlikely event that something goes wrong, which admittedly is unlikely because my father is quite responsible. He did have a 30-day late a few years back on it, which is unusual for him.

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That would be an example of something going wrong.  Being an AU on TL with a late isn't benefitcial.

+1 to comments already made above as well.

[Revelate]

Hrm.

I'm going to disagree with some and suggest potentially keeping it.  You can always remove the AU in the future at any point, and you're not really conflated with his finances assuming the responsibility is listed as his if you aren't making charges on the card.  While I agree with CGD that having a strategy for one's credit is a good thing for literally everyone, I wouldn't rush to airstrike it just yet.

How old an account are we talking about and what does the rest of your file look like and what's your score?  I wouldn't simply automatically airstrike it as a 30 day late from more than call it 2 years ago may not really be impacting your score in any meaningful way even when it comes to UW.