I'm an authorized user on my mother's Citi Costco and best buy visa cards and i have been since i was in college. Problem is i am trying to purchase a house soon and she used her cards to about 83% of the limit on her last trip overseas. I checked my score and did a simulation but It doesn't show that i have to pay that down. My mortgage score has stayed the same since November with no change even with her recent charges. I want to close or remove myself from the accounts. I don't make the payments for the card. So since we got preapproved with a lower score but my score has also gone way up with her even with her current charges.
I want to know if i should be worried that come time to close we won't be able to get our home loan because of my mom's cards?
My wife and i also have a sizeable income.
Someone with more experience will more than likely chime I'm sure but going to say this here. Loan officers when doing a manual review of your credit reports they will usually not count any AU accounts that show up because they do not take that into consideration when determining DTI. To them it's like they never existed to begin with. Assuming your mom is going to pay off that debt relatively quickly I wouldn't worry about it too much. If she plans to keep it for awhile there that's a different story.
This month i removed myself as an auth user on a cap one card. Upon removal my Fico dropped 28 points. Sigh, if im not mistaken it affects Average age of accounts as well. Ive read that taking the ding for removing the card will eventually help more than harm if it is always carrying a high balance each month. Removing it may be ideal even though it may hurt for now but im sure someone else will chime in. Im not sure if the high balance of that card is counted in your DTI monthly payment but i know utilization is.
I strongly caution you. Please do not remove yourself from any credit cards until you speak with an experienced Loan Officer. I have a client, who decided to remove himself (without contacting me first for guidance) and sure enough his scores dropped. We LO's have tools that can analyze your credit by lowering balances, what impact paying off installment loans will have, adding or deleting accounts. These are invaluable tools and have saved many a deals for the years. I would recomend starting the process of getting pre-approved for a home loan as soon as you can. It's never too early.
Best wishes to you!
So before my preapproval, I was at a 625 but even though my moms card amount is high my score has jumped to 639 and should be over 640+ next week but the loan officer working on the loan is asking that I have my mom remove me and my score will jump up. Should I be worried that even though my score has gone up after I was preapproved for the loan, I won’t qualify or pass underwriting?
Listen to the loan officer. That will be factored into your DTI. So remove yourself ASAP and your scores will go up all things being equal.
Yeah he replied back and said it will affect my principal and PMi.
He is correct. Since you are only an "AU" on the card, should be pretty easy to take you of.