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Question about authorized user reporting

junior1790
Member

Question about authorized user reporting

Hello all, i've done some searching here but cant find the specific answer.  I am an AU on a family members amex, they have a high balance as some of it is business, some personal.  Balance carried is about 50k, it shows up on my credit report but when i call amex the first thing they say is i am not financially responsible for the account.  My questions are if i am not financially responsible why has it been showing on CR for several years and #2 if i close my card and take myself off as a AU will that positively affect my score? little confused on that, thank you for the help any of you may have.  

Message 1 of 8
7 REPLIES 7
Berk
Established Contributor

Re: Question about authorized user reporting

You are an AU so, good and bad associated with that card will show up on your CR. Great for you if the account owner has a high credit limit and low util. Not so good if the util is high - as you found out. Whether or not being removed will positively affect your score cannot be answered as there is not enough info provided.

Over $200,000 in credit across 12 cards.

FICO ranges from 791 -824 as of 07/26/2019
Message 2 of 8
CreditGuyInDixie
Super Contributor

Re: Question about authorized user reporting

Berk is right.... not enough info to help you.  Here are the things that would help:

 

According to your credit report....

     When was the "date Opened" for the AU Amex card?

     Is the Amex card a "charge" card or a true credit card?

     What is the credit limit on that AU card?

     Is the reported balance always around 50k?

 

 

The following questions assume we are NOT including your AU card:

 

      Do you have any open credit cards? 

              If so, how many?

              What is the combined credit limit on all your cards?  (again, ignoring the AU card.)

 

      How many accounts do you have on your report?  (Total number, all accounts, closed and open)

 

      What is the date opened of your oldest account?

 

PS.  You write:

 

"if i close my card and take myself off as a AU...."

 

Just for clarity, the card is not yours and you cannot close it.  What you could do is ask the person who owns the account to remove you as an AU.  By suppling answers to all the questions above, people here will be able to advise you on whether that's a good idea.

Message 3 of 8
junior1790
Member

Re: Question about authorized user reporting

thanks for the replys, sorry for the lack of info now i have a better picture of whats needed.  

When was the "date Opened" for the AU Amex card? Date Opened is 9/1987

     Is the Amex card a "charge" card or a true credit card? Charge Card

     What is the credit limit on that AU card? No Limit Posted

     Is the reported balance always around 50k? Yes, the balance is part of the amex sign and travel which im sure youre familiar. 

Do you have any open credit cards? yes

              If so, how many? 3

              What is the combined credit limit on all your cards?  (again, ignoring the AU card.) $7,650

 

How many accounts do you have on your report?  (Total number, all accounts, closed and open) 1 report showing 12, exp showing 30

 

      What is the date opened of your oldest account?appears to be 1999

 Also i took myslef of as an AU, that particualr card is closed but the account is still open overall..

 

hopefully thats helpful, thank you..

 

Message 4 of 8
CreditGuyInDixie
Super Contributor

Re: Question about authorized user reporting

Thanks so much, Junior!

 

Here is the best way to think about it.  The advantage of an AU card is really to help you with only one factor:

 

       Age of Oldest Account

 

That's why the textbook case of somebody who benefits is a college kid who is just getting started.  He might have zero accounts of his own.  So the total age of his profile is 0 years.  He gets added as an AU for a card owned by his mom that is (say) 20 years old and presto!  His age of oldest account is suddenly 20 years old!  So is another important factor, the average age of accounts.  Now he can start applying for cards of his own (or loans) as if he had a very old trusted profile with a perfect payment history.

 

In this textbook case, however, his Mom is careful to give him a card that has a very low utilization on it.

 

Your case was interesting because you were trying to find out how the huge balance reported on thsi AU account was affecting your CC utilization.

 

It turns out that for two reasons the huge balance is not affecting you:

 

(1)  AU cards (including credit cards) are not included in CC utilization calculations for the widely used FICO 8 model

 

(2)  Amex charge cards are not included in CC utilization calculations for the widely used FICO 8 model

 

If I am mistaken here I'd ask one of the forum veterans to correct me.  I am pretty sure (but not 100%) that is what they have confirmed.   Thom Thumb is a regular commenter who knows a lot about this.  I do not know how AU or charge cards are considered in FICO 9 or in the "mortgage" models.

 

So what I just said is an argument for keeping it.  There is also an argument for dropping the AU card.  That is that you already have a very old "age of oldest account."  According to you, you have an account appearing on all three reports that was opened in 1999.  That is very old!  Almost 20 years.  Furthermore you already have many accounts, so the AU account is having little impact on the average age of accounts.  So by this argument, somebody would say that an AU card is really like training wheels, for a kid who's just learning to ride his bike.  You have been riding for a very long time.  So take the training wheels off.

 

I hope that gives you a context for making a decision.  There's reasons to keep it and reasons to drop it.  If you go with keeping it, work with folks here to be 100% certain that there is no way that the 50k could be affecting your utilization.  If you decide to drop it, make sure that your current 1999 account isn't in danger of falling off (e.g. make sure it is open).

Message 5 of 8
RobertEG
Legendary Contributor

Re: Question about authorized user reporting

A major factor with respect to AU's is that whenever you have an AU reporting, that automatically means that the score produced is no longer representative of only your own credit history.  A creditor has no way to back out the effect of an AU account and generate a score that represents only your own risk analysis.

 

When rebuilding, the consumer is usually not seeking high levels of credit, and the creditor may not do a detailed manual review.

Thus, any isssue of whether your score is representative of only your own history may not be a consideration.

 

However, as you move up the credit ladder and request higher levels of credit, chances of a manual review also increase.

Upon seeing an AU in your credit report, the creditor may have concerns over reliance on the score, and discount its value.

Some mortgage lendors will even require removal of any AUs as part of their underwriting process so that they can get a "real" score.

 

 

Message 6 of 8
Thomas_Thumb
Senior Contributor

Re: Question about authorized user reporting


@CreditGuyInDixie wrote:

Thanks so much, Junior!

 

Here is the best way to think about it.  The advantage of an AU card is really to help you with only one factor:

 

       Age of Oldest Account

 

 

 Your case was interesting because you were trying to find out how the huge balance reported on thsi AU account was affecting your CC utilization.

 

It turns out that for two reasons the huge balance is not affecting you:

 

(1)  AU cards (including credit cards) are not included in CC utilization calculations for the widely used FICO 8 model

 

(2)  Amex charge cards are not included in CC utilization calculations for the widely used FICO 8 model

 

If I am mistaken here I'd ask one of the forum veterans to correct me.  I am pretty sure (but not 100%) that is what they have confirmed.   Thom Thumb is a regular commenter who knows a lot about this.  I do not know how AU or charge cards are considered in FICO 9 or in the "mortgage" models.

 

I hope that gives you a context for making a decision.  There's reasons to keep it and reasons to drop it.  If you go with keeping it, work with folks here to be 100% certain that there is no way that the 50k could be affecting your utilization.  If you decide to drop it, make sure that your current 1999 account isn't in danger of falling off (e.g. make sure it is open).


Here is what I know:

1) AU cards are always considered in Fico mortgage (EQ and TU Fico 04, EX Fico 98) scoring.

 - For all Fico mortgage models the AU card is included in the "count factor" for # open accounts with a balance if it has a non zero balance.

 - If the AU card is a charge card it is not included in aggregate credit card utilization

 - If the AU card is a charge card its balance to "high balance" ratio (B/HB) is a scoring factor in EX Fico 98 mortgage score but not EQ or TU FIco 04 mortgage scores.

 - Fico 08 is flaky in how it looks at AU cards. For those that have an AU card which they have not used in many years, the card is likely  ignored in all Fico 08 scoring factors although it does show as an account on credit reports. That's the way my AU card is treated.

 

My recommendation would be to drop the AU card. There is potential downside for your Fico mortgage scores due to:

a) an additional open account (AMEX) reporting a balance (particularly EQ Fico 04 - tested using my AMEX)

b) due to a high reported B/HB (EX Fico 98 - tested using my AMEX).

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 7 of 8
Bella007
Senior Contributor

Re: Question about authorized user reporting


@Thomas_Thumb wrote:

@CreditGuyInDixie wrote:

Thanks so much, Junior!

 

Here is the best way to think about it.  The advantage of an AU card is really to help you with only one factor:

 

       Age of Oldest Account

 

 

 Your case was interesting because you were trying to find out how the huge balance reported on thsi AU account was affecting your CC utilization.

 

It turns out that for two reasons the huge balance is not affecting you:

 

(1)  AU cards (including credit cards) are not included in CC utilization calculations for the widely used FICO 8 model

 

(2)  Amex charge cards are not included in CC utilization calculations for the widely used FICO 8 model

 

If I am mistaken here I'd ask one of the forum veterans to correct me.  I am pretty sure (but not 100%) that is what they have confirmed.   Thom Thumb is a regular commenter who knows a lot about this.  I do not know how AU or charge cards are considered in FICO 9 or in the "mortgage" models.

 

I hope that gives you a context for making a decision.  There's reasons to keep it and reasons to drop it.  If you go with keeping it, work with folks here to be 100% certain that there is no way that the 50k could be affecting your utilization.  If you decide to drop it, make sure that your current 1999 account isn't in danger of falling off (e.g. make sure it is open).


Here is what I know:

1) AU cards are always considered in Fico mortgage (EQ and TU Fico 04, EX Fico 98) scoring.

 - For all Fico mortgage models the AU card is included in the "count factor" for # open accounts with a balance if it has a non zero balance.

 - If the AU card is a charge card it is not included in aggregate credit card utilization

 - If the AU card is a charge card its balance to "high balance" ratio (B/HB) is a scoring factor in EX Fico 98 mortgage score but not EQ or TU FIco 04 mortgage scores.

 - Fico 08 is flaky in how it looks at AU cards. For those that have an AU card which they have not used in many years, the card is likely  ignored in all Fico 08 scoring factors although it does show as an account on credit reports. That's the way my AU card is treated.

 

My recommendation would be to drop the AU card. There is potential downside for your Fico mortgage scores due to:

a) an additional open account (AMEX) reporting a balance (particularly EQ Fico 04 - tested using my AMEX)

b) due to a high reported B/HB (EX Fico 98 - tested using my AMEX).


This is a great thread! Thank you, OP! I have question about AU accounts on someone's credit report. Do they stay on the credit report even if the person is taken off as an authorized user? One of the reasons I ask is because my husband was AU on two of my cards prior to BK. Post BK, only one of those accounts still shows on his CRs. He is AU on three of my cards now, but I'm thinking about taking him off of two of them because he's opened two CCs of his own now. 

Current Scores: EQ 679;TU 647; EX 679 Gardening since 11/7/18
Beginning Scores-- EQ 632; TU 576; EX 619 FICO 08 (06/13/16) - BK7 discharged 11/2015
Message 8 of 8
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