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Authorized User still works?

VoltaicShock
Established Contributor

Re: Authorized User still works?


@RobertEG wrote:

AUs still "work" in the sense that if they are reported to the CRA and the FICO algorithm includes them in scoring, they can affect your three-digit resulting score.

 

However, an inherent effect of having an AU account included in your scoring is that the resulting score is necessarily no longer reflectiive of a risk assessment of only your own credit history.

Creditors know this, and if they do a manual review and see the presence of one or more AU accounts,they are aware that the score they are receiving is not an evaluation of only your own credit history,and thus can choose to disregard or give less weight to the score in their credit determination.

If the requested credit is substantial, such as for a mortgage, some creditors will routinely, as part of their underwriting process, request that you remove the AU account prior to their final lending decision.

 

If a creditor does not do a manual review of your credit report, which is often the case when you are building or rebuilding and applying for relatively low amounts of credit or for secured cards, then if an AU improves your score, it can be a great rebuilding tool.

 

However, once you move on to higher levels of unsecured credit, where chances of a manual review are high, it might be time to remove the AU accounts, and thus ensure that a prospective creditor gets a "real" score.


So what I got out of this is, remove it if they ask and hope your score is still good enough for what you want.  Then after you get it add yourself back.



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