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Would it help or hurt my score?? (Credit Card)

firemartinez1980
Regular Contributor

Would it help or hurt my score?? (Credit Card)

About 3 years ago my wife added me as an authorized user on 1 of her credit cards to try and help raise my credit and score. She has a limit of $5000 and has had the card about 6 years and has never missed or been late on a payment. If I remember correctly I think by adding me this helped my credit score go up, but it wasn't dramatic. At the time she probably had about a $600 balance on the card....

 

Now 3 years later and due to having to use the card for emergency funds, the card is maxed out on the $5000 limit. Still she pays $80-$100 a month on it so the payments are good, but that big of a balance (Useage) I feel it is killing my score...So here is the question

 

Would it help raise my score by getting off that card as an authorized user since it has a such a high balance??

 

I am sitting at about 600 now and need to get to around 640 in the next 2 months to get a VA Home Loan.

 

Message 1 of 7
6 REPLIES 6
coreysw12
Valued Contributor

Re: Would it help or hurt my score?? (Credit Card)

It depends on what the rest of your credit profile looks like.

 

If you don't have any other cards, then her card is causing you to have a 100% (or nearly so) credit utilization rate.

 

But if you remove yourself from it, then it probably won't make your score any better, because you'll basically have no utilization on no available credit. Both scenarios aren't good.

 

Your best bet is to stay on as an AU, and pay down the card. Every little bit helps. Even if you can only pay off $1000 of it, your score will improve a fair bit. If you can pay off $3-4k of it, you'll probably hit your 640 target no problem. Mortgage underwriters aren't generally big fans of giving mortgages to people with maxed out credit cards who are only making minimum payments - you guys should really work on getting on top of that before anything else.

    Total Loan Balance: $58k / $65k

    Total SL: $42.4k
Goal cards:



United 1K - 675,000 lifetime flight miles    |    Chase Status: 3/24
Message 2 of 7
Remedios
Moderator

Re: Would it help or hurt my score?? (Credit Card)


@firemartinez1980 wrote:

About 3 years ago my wife added me as an authorized user on 1 of her credit cards to try and help raise my credit and score. She has a limit of $5000 and has had the card about 6 years and has never missed or been late on a payment. If I remember correctly I think by adding me this helped my credit score go up, but it wasn't dramatic. At the time she probably had about a $600 balance on the card....

 

Now 3 years later and due to having to use the card for emergency funds, the card is maxed out on the $5000 limit. Still she pays $80-$100 a month on it so the payments are good, but that big of a balance (Useage) I feel it is killing my score...So here is the question

 

Would it help raise my score by getting off that card as an authorized user since it has a such a high balance??

 

I am sitting at about 600 now and need to get to around 640 in the next 2 months to get a VA Home Loan.

 


Hi and welcome to the forums 

 

Maxed out card carries a scoring penalty that's pretty significant. 

If you're looking at a mortgage, you will need to address whatever is keeping your score on the low end, that includes AU card and any derogs you have. 

 

If you want, you can list your accounts  and baddies for more help. Make sure to include when they were opened, limits, balances etc 

 

 

 

When someone asks you *What's wrong*, and you're not sure if you want to start listing it in alphabetical or in order of importance.
Message 3 of 7
firemartinez1980
Regular Contributor

Re: Would it help or hurt my score?? (Credit Card)

I have a Bankruptcy from 2012, a Credit card from USAA with a $100 balance that is always paid on time and a collection for $800 with Midland Funding from 2014 (In the process of trying to settle this and have it removed).......Other than that, My Wife's credit card that I am an AU on.

 

Score has basically been stuck around 600 for 2-3 years now and it seems nothing helps.

 

I was hoping by taking myself off her card it would show that $5000 balance as gone and if I can get this collection removed from Midland hopefully it the score would go up

Message 4 of 7
coreysw12
Valued Contributor

Re: Would it help or hurt my score?? (Credit Card)


@firemartinez1980 wrote:

 

Score has basically been stuck around 600 for 2-3 years now and it seems nothing helps.


I can conclusively tell you that nothing has been helping your score go up because you have this unpaid collection on your report. As long as that collection remains there, and unpaid, it will be virtually impossible to make your score go up. it's essentially impossible to have a score better than 600 when, every month, a collection is continually being reporting as defaulted.

 

Nevermind the authorized user question. That's really not relevant here. The only relevant thing is that unpaid collection.

 

See if you can negotiate a "pay for delete", that is, when you offer to pay off the collection an in return they delete the collection off your credit report. While that's the ideal proposition, realistically you just need to do whatever you can to get that collection back in good standing. Otherwise, your score is not going to improve.

 

If you're having trouble coming up with the funds to pay off that collection (and pay off some of the maxed out credit card), you should really look into finding some extra income from somewhere. Have a garage sale, do a side job, etc. Because there really isn't any other magic bullet that will add 40+ points to your score in 2 months.

    Total Loan Balance: $58k / $65k

    Total SL: $42.4k
Goal cards:



United 1K - 675,000 lifetime flight miles    |    Chase Status: 3/24
Message 5 of 7
firemartinez1980
Regular Contributor

Re: Would it help or hurt my score?? (Credit Card)

I have read that Midland is good about removing collections from credit reports if the account is over 2 years old. I received a settlement offer from them and plan on paying it off in the next week or so. With that said, once that collection is gone, what kind of score raise could I expect?

Message 6 of 7
Remedios
Moderator

Re: Would it help or hurt my score?? (Credit Card)

AU question is very relevant here because maxed out card can have a huge scoring impact. In OPs case, with only one card in his name, it's probably both individual and aggregate utilization that are affected. While impact on "dirty" files may be less, it's still significant. 

 

@firemartinez1980 You will need to address that collection. If they do PFD and you remove yourself as AU, there will be scoring gain

 

However, if you and your wife are doing joint app for mortgage, you will still need to work on that balance. It's affecting your wife scores as well. 

When someone asks you *What's wrong*, and you're not sure if you want to start listing it in alphabetical or in order of importance.
Message 7 of 7
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