Authorized users on credit card and credit based insurance scores

[Ignatius_Reilly]

Hello everyone, this is my first post.

I have what may be a confusing question. 

I recently opened some new credit cards (an Amex Green and Gold and a Chase Freedom Flex).

I have excellent credit

FICO 822,

Vantage Score 3  819

Equifax 825

I added my wife as an authorized user on all 3 cards.

She recently opened a Chase Sapphire Preferred and added me as an authorize user.

Can anyone explain whart being added as an authorized user will do to 

A. Your credit score and credit report?

B. What it will do to our credit based insurance score? I had never even heard of a credit based insurance score/report until after I opene the cards. I understand that the new cards themselves will hammer my insurance score, but whart will being listed as an authorized user do?

I have also read on here that it is possible to be removed as an authorized user on Chase cards and have it removed from your credit report, but have read that Amex can be more difficult.

Do authorized users even affect these reports? And if so, is it worth it to now have them removed?

[Ignatius_Reilly]

I recently (since this April) got 3 new cards. I got a Amex Green and Gold, and Chase Freedom Flex. My wife got the Chase Sapphire Preferred.

I added her as an authorized user on all 3, the Green, Gold and Freedom Flex.

She added me as anauthorized user on the Chase Sapphire Preferred.

We have very good credit (or did depending on how this affects it).

What can I expect to happen to my credit scores and reports including my credit based insurance scores (like LexisNexis)?

I know I will get hammered on the credit based insurance scores (didnt know this until after i applied for the last card) for the cards I applied for, but what will being an authorized user do to these scores? Specifically the credit based insureance scores?

Would it be wise (I know, a little late for me to be wise) to remove each other as authorized users?

[ptatohed]

You can relax I_R.  You, your wife, your score, her score will be fine.  Leave things as is and enjoy the new cards.  

[Ignatius_Reilly]

thanks for the response. 

Does anyone know how authorized users affect credit scores/reports generally speaking. I have been able to find very little info on this.

[JoeRockhead]

AU accounts (on revolvers only) are more beneficial for people trying to establish credit, and who have no/limited accounts, or history of their own. 

For people with their own established credit, they have little positive benefit.

They can have a negative impact to your scores if the card(s) reports high utilization. There can also be a slight score penalty if all your AU accounts report a zero balance.  

[Ignatius_Reilly]

I am not necessarily looking for some huge benefit from being/having an authorized user, it was more for convenience for her, and for me it was to help accumulate more travel points. 

Would canceling the authorized user cards be beneficial or would it not really change much at this point?

Im also concerned that i really hurt my credit based insurance score, does anyone have any insight into how being/having authorized users affects that score?

[Ignatius_Reilly]

I guess a simple short question about this is would removing the authorized user cards improve my FICO and other credit scores and would it improve my credit based insurance scores?

I have read here and other forums that you can easily have Chase authorized user cards removed from credit reports/scores. I have read that you can do that with Amex as well, but i have also read where people had issues doing this with Amex.

I guess Im also very confused what being an authorized user does for your FICO and other credit scores. 

I honestly thought it would do nothing for a marrie couple who, in my mind, were basically just sharing each others card.

[JoeRockhead]

As long as the reported usage etc... stays in check, there's no harm to your Fico scores in having the accounts. I can't answer with certainty what effects, if any, they would have on your insurance scores.

Hopefully someone with experience or insight regarding that will chime in. 

[Thomas_Thumb]

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@Ignatius_Reilly wrote:

I recently (since this April) got 3 new cards. I got a Amex Green and Gold, and Chase Freedom Flex. My wife got the Chase Sapphire Preferred.

I added her as an authorized user on all 3, the Green, Gold and Freedom Flex.

She added me as anauthorized user on the Chase Sapphire Preferred.

We have very good credit (or did depending on how this affects it).

What can I expect to happen to my credit scores and reports including my credit based insurance scores (like LexisNexis)?

I know I will get hammered on the credit based insurance scores (didnt know this until after i applied for the last card) for the cards I applied for, but what will being an authorized user do to these scores? Specifically the credit based insureance scores?

Would it be wise (I know, a little late for me to be wise) to remove each other as authorized users?

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The purpose of AU cards was initially to provide an opportunity for non working spouses, parents and children to have/use credit. Additionally AU cards between spouses can be useful for shared expenses - particularly when the account is designated solely for that purpose.

I am not an advocate of AU cards for those who have their own credit. They add little to no value. In fact, they can be a liability toward score. (The all AU $0 penalty and potentially a high UT% penalty). AMEX green/gold/platinum cards don't count toward aggregate revolving utilization or toward recent revolving account activity

The OP is correct in that CBIS models strongly penalize for new accounts. Impact is 2 years with effect waning over that time.

Both TransUnion and LexisNexis CBIS models consider average credit card limit in scoring. So, best to have higher limit cards. Optimal avg CL is over $10.5k and $9k for LN and TU CBIS, respectively. AMEX charge cards are NPSL so they can't help boost or drop average CL.

Side note: LN views store cards negatively and will penalize for them being on your file - even if closed.

Should the OP and his DW close their new AU accounts and have them removed from their respective credit files? Probably a good idea if the authorized user has no need to use the account(s). Perhaps keep one if the account is designated solely for shared expenses. The AU accounts are not really benefitting each spouse's Fico 8,9,10 scores - imo.

Not sure how AU accounts factor into the various CBIS models. The 3 may count against her and the 1 against you as additional new accounts.

[Ignatius_Reilly]

"Not sure how AU accounts factor into the various CBIS models."

And that is the only real fear in all of this. Our credit scores are very good to excellent, but I live in New Orleans and home owners insurance is very expensive and a real concern, as is auto (Louisiana has the second highest car insurance rates in the country behind only California). I dont forsee needing a loan on another home or buying another car within the next 2 years but things can and do happen. The insurance is a must have obviously.

I guess the safest course is to remove each other as authorized users