Question About Being Added As An Authorized User

[Garland_Russell]

Over the last couple of years, I've rebuilt from FICO 439 to 657. At the same time, more and more negative information is dropping off my credit report, so I'm trying to take a few next steps toward getting that 657 into the 700s.

My wife was able to rebuild her credit a little bit faster than I was, so is ahead of me on the FICO ladder. She has several cards, with Capitol One, Chase, Citi, Amex, and Discover. She already added me as an AU on Discover a couple of years ago ($12K CL, ~5% usage, paid in full every month), which is certainly helping me. So we're discussing what other cards she may be able to add me to.

Is there any disadvantage to her adding me as authorized user on her Cap One and Citi cards? Any disadvantage to either of us, that is? I was just approved a week and a half ago for a Cap One secure card, and am awaiting that card. I cleaned up a couple of collection accounts that should disappear from my credit report within a couple of weeks, and when they do, will probably appply for one more easy starter card (possibly even another secured card). Would being added as an authorized user harm either of us in any way?

And for that matter - given that Capitol One just approved me for a card that I haven't even received yet, would it look bad for either one of us for her to add me as an AU now? Or would it be better to wait a month or two?

Thank you all in advance...

[calisig]

being added as an authorized user only hurts you if utilization is high on the card you are being added to. Depending on the algorithm and your other accounts, it can also reduce your AAoA, so be aware. I suggest only being added to accounts that report less than 20% utilization. Definitely don't get added to accounts with over 50% utilization.

The only potential disadvantage to her is your spending on the card...

[FireMedic1]

Welcome@Garland_Russell  Whats in your wallet? We know what your DW has. Nice recovery BTW. I doesnt hurt having a AU card. Once we can see all your accounts. It will help us help you. Congrats on your approval. Without knowing your profile. The new card hampered your climb to 700. Lets see what you got. May take no more apps and garden until 700 comes alive.

[Garland_Russell]

Whats in your wallet? We know what your DW has. Nice recovery BTW. I doesnt hurt having a AU card. Once we can see all your accounts. It will help us help you. 

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@FireMedic1 wrote:

Welcome@Garland_Russell  Whats in your wallet? We know what your DW has. Nice recovery BTW. I doesnt hurt having a AU card. Once we can see all your accounts. It will help us help you. 

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Nothing. I'm an authorized user on my wife's Discover card, and as of last Friday she added me to her Citi card as well. I applied for a Cap One secured card a couple of weeks ago, was approved, and just got an e-mail notice Monday telling me it was in the mail, but there's no activity on it yet.

So the only things on my credit report at the moment are the 4 collection accounts (actually 3; I paid 2 of them off over the last couple of weeks and 1 of those has already been deleted from Transunion but not yet Experian), and the authorized-user status on my wife's Discover card.

Pretty thin at this stage. I have no expectations of any significant changes to the FICO score in the short term, and probably not much in the medium term - I don't know how much the addition to the Citi account, a couple months of shrewd usage of the Cap One secured card, and the deletion of those 4 collections accounts will help; at this point, whatever effect they might have will just be a bonus. Most likely scenario seems to be that by early 23, I'll start to see some substantial improvements. That's the goal for which I'm trying to position myself at the moment.

Thanks for the help, by the way...

[FireMedic1]

Thanks for the update. Best case scenario with FICO is 3 revolvers, installment loan, and you as the primary. Congrats on your Cap1 approval. In time you can try like Discover secured which will graduate with a CLI. Mission Lane doubles your CL. Theres no secret formula for when Cap1 will graduate. If it ever will either. The AU card helps FICO-wise. When you apply for a card some lenders ignore AU's. Your starting your journey. Spread out your apps. You can get there. Just takes time. Slow and steady wins the race. Once that last CA falls off. Nice score changes will happen. Good Luck!

[Anonymalous]

When you're added as an AU, you inherit the card's history. This can help your score via age and by increasing your overall credit limit, which can potentially reduce your overall utilization. But you can also be hurt if there are any negatives on the card, and the utilization of the card will affect your overall revolving utilization, and high utilization on a specific AU card also has a separate impact on your score. So the best AU card is an old card (Amex doesn't work) with perfect payment history, which typically has low or no utilization, and a decent credit limit.

An AU can boost your score, but if the 3 bureaus think you're misuing them (buying tradelines, for instance), they might not count them, which can result in no effect on your score. This shouldn't apply in your case, because sharing a card with a spouse is why AUs were created, but nobody's sure what algorithms they use (same last name and address can't hurt).

The other caveat is that while it can affect your score, a FICO (or Vantage) score is just your credit profile summarized in a single number. A lot of lenders rely on their own internal score, and all of them look at your overall credit profile and match it against their own internal criteria. They don't just rely on a magic number generated by a third party algorithm.

What I'm saying is that your profile matters more than your score. AUs cards can help, but they're not a magic bullet, and you probably want to be a bit selective. Your DW's oldest cards are the obvious choices, but avoid any with lates, and if she typically lets certain cards report a balance to the 3 bureaus (or will, with your spend), then you need to look at the effect it will have on your utilization over the long term, because you can't just turn off an AU one month and then turn it on the next. And don't rely on them too much. Continue to expand your own credit history, as well. Getting that secured card from Capital One is a great start, because if you use it correctly, it will show that you -- not your wife -- can manage a card properly. Give it some time to age, and add another card, and then another. It's important to have cards in your name.