Where to go from here?

[Anonymous]

I am 20 years old. Recently did a credit check and had a TU score of 691 and a utilization of 93% showing balances totaling about 40k.

My accounts are

Chase Authorized User 19k balance. 20k limit. Account since 2/2004

Chase Authorized User 19k balance. 20k limit Account since 4/2010

student loan $2,750 balance since 9/2009

Capital one student individual account 0 balance. cred limit of 500. since 8/2010.

All of which have never missed a payment and in good standing.

So I recently had my parents taken off the older chase account because of the high balance and the rewards were better on the newer chase account. I was also recently put on my mom's american express account as an authorized user.

My goal is to get a few credit cards from discover, american express, citi ect.. and just keep them and build credit. I would also like some decent limits because i spend about a $1000 every month on my capital one card. After i make large purchases i go online and pay it the same day because the limit is only 500. (by the way is this bad to do?)

I work part time and make about 10k a year and have a good amount of savings. Also a full time student. So my main question is, where would you guys go from here?

My parents also have many other credit cards with low balances and perfect payment history. Is it worth it to be an authorized user on those accounts?

A lot of questions here but your help is appreciated! thanks guys

[RobertEG]

My first reaction is that, for a 20-year old, you have apparently established a very decent credit file, and understanding of how credit reporting works!

Above all, in building for the future, my suggested goal 1, goal 2, and goal 3 should be to never, ever, be delinquenct.  One slip there has major and lasting impact.

Reliance on AU cards is a slippery slope.  I, personally, would never stay on as a AU when balances over 90%, os getting off of those cards was, in my opinion, the right move.  As far as being added to another, lower % util card with good payment history, sure, that is a smart move for now.

I, personally, am not a big fan of the whole AU status piggy-backing.  Just my personal opinion, as it distorts credit scoring based on a credit history that was unearned.  Some potential creditors may feel the same have the same  when doing a manual review of your CR, and even though they count in FICO scoring, may discount their impact in their approval process.  Who knows.

Getting new cards on your own will, in the long run, begin to build your own credit mix, a thicker credit file, and establish your own account ages  However, you must balance that against the short-term impact of reduced AAoA and a new inquiry in order to get the card.  If you are not planning on applying for other, necessary credit within the next 6-12 months, it might be worth it to take the small hit now in order to build your own, independent history for the future.