AU - AAOA and Utilization Question for Re-builder

[Anonymous]

So I've been added to my Mom's Sears Citi card recently as an AU. She currently as a 46OO CL. But shes carrying a 87% utilization if we don't get that balance down prior to the report date around 10/31/18. There is no way I'm letting that utilization hit my credit. However - I think I can help her pay it down maybe to 30% utilization.

Here is where I get confused on if I should bail or not before the 31st if I don't help her pay it down. She opened the card in 1996. So she's got a solid 22 years which would help faciliate my AAOA bit time. It will also easily become my oldest account by 10 years. 

I have 3 secured cards all with 200 limit. 2 are brand new this month and I have 1 more on the way which. So that will be 4 secured cards with $200 limits - 3 of which were opened this month. I also opened an SSL with NFCU because I didn't have an open installment loan. 

My question for you FICO experts is what should I do? I need some serious help on this. If I get her utilzation under 30% will it still be worth it? Or should I just get out of it now. My Mom is pretty responsible and she says she doesn't have any lates but will the old utilization from previous months hit me even if I pay down this month? What kind of score increase can I expect if utilization is inline (30% or better) with AAOA?  

Any and all advice is much appreciate for my pathetic self ;-( . 

[Anonymous]

There is no such thing as "old" utilization.  Utilization only matters at the current moment in time, taking into account whatever is reported on that account.  That being said, even "bad" utilization can be overcome in 1 cycle if it's paid down... so even if that 87% utilization can't be paid down to 30% this cycle, paying it down to 30% next cycle will be no different other than you not seeing the benefit of the AU account for another 30 days.  A 22 year old account and the associated AAoA boost on your young file with an account at or around 30% utilization is probably going to offer more scoring benefit than harm.  At 87% consistently?  I'd drop it... but not because of 1 cycle.  If she can get [reported] utilization down to under 8.9% and keep it there it would be a win-win... no or at least less interest paid on her part and a nice scoring benefit for you.

[Anonymous]

Thanks so much for the clarity. I didn’t realize she opened it in 1996. Guess I’ll just wait it out and hopefully we can get balance down quickly. I’m hoping the combination of the SSL technique and this AU will give me the boost to 750. 😊

[HeavenOhio]

@Anonymous, if the goal is "maybe 30%," aim for 27%. That'll get the card under the 28.9% threshold and keep it there when the next month's interest hits the statement.

[Anonymous]

Sorry to go off thread a bit, where does one find a thread with the Acronyms used here..

To the OP, I used google (credit knowledge) (how to deal with debts owed) it all led me here.. nice signature and hope to follow sort of the same road..

[Anonymous]

If you go under the welcome section then general info you'll find a sticky thread titled "common abbreviations" which should include everything you'd want to know.

[Anonymous]

So my mom and I have different last names but I do share a previous address. I've read its hit and miss with FICO 08. I might not see the benefit of AU. Anyone have any insight on this? 

[UncleB]

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@Anonymous wrote:
Sorry to go off thread a bit, where does one find a thread with the Acronyms used here..

To the OP, I used google (credit knowledge) (how to deal with debts owed) it all led me here.. nice signature and hope to follow sort of the same road..

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Hi @Anonymous, this link should help:  http://ficoforums.myfico.com/t5/User-Guidelines-General/Common-Abbreviations/td-p/88458

[Anonymous]

Great advice from the other folks.

Hey Brandon, assuming your mom is able to get her card paid way down, we can give you a simple test to find out whether FICO 8 is counting the AU card into your score.  Actually the test works as long as her balance is stable (not changing much) for a couple months in a row.

A bit off topic, but for what it is worth, Brandon, I'd think twice about trying to use your money to pay down someone else's card -- if the reason is to help your score.  A good question to ask is: would I be giving my mom money to pay down her card if I wasn't an AU?  I.e. is it normal for me to pay my mother's bills?

In general mixing your finances with someone else's is asking for trouble.  Even married people sometimes choose to have separate finances (though marriage is usually the exception to the Do Not Mix rule).  It's certain to be a bad idea if you are doing it to help your score.

The fact that your mom has run up credit cards close to their limit with no easy way to pay them to zero in 1-2 months suggests that she may have difficulty managing credit cards -- the help you give today may have to be repeated many times in the future.

These are just a few thoughts and I am sure you'll know what the bbest decision is.  Happy to discuss further if you like.

[Anonymous]

Sorry for delay. Somehow I never saw your response CGD.

Yes sure I’d love discuss further. I’ve really gotten super focused and maybe obsessed with my FICO these last few months. I can use all the help I can get and am very gracious for your feedback.

I have actually ran across another scenario that might work. My fiancé has a Capital 1 that we have both contributed to running up the balance on. Well I’ve told her that I planned on getting that balance paid up being that I used it as well.

So hear me out on this scenario. Add myself as an AU to her card. She has a $8500 CL. I will pay it down to $0 this month as I promised her anyways. She’s has around 2 year history with perfect payment history.

Let my DM card report on Oct 30 with 76% utilitization, 22 year perfect payment history, $4600 CL. If AU works I double the age of my oldest account and increase AAOA by 2 years with DM tradeline. Temporarily my score might take a hit.

Keep the rest of my revolvers at $0. Allow fiancé card to report on the November 23rd - 0% utilization, 2 year perfect payment history and $8500 CL. If FICO factors both AU’s I will have at most a 25% utilization by November. While not dropping maybe AAOA under 5 years. I’d actually go from 5.5 to 5.13 AAOA.

My fiancé and I plan to ask for CL increase on her Cap 1 card which we were granted 50% increase around 12 months ago. If they grant another increase that will further help utilization and allow DM time to get balance down.

This way I pay nothing towards DM card but can still capture her history to help leverage an app for an unsecured card. Then I can get rid of her card and garden. Furthermore I have NFCU SSL technique being reported for the first time on October 30th. I have no open installenent loans at this time. So that should give me another boost?

We want to start talking with lender in 2020 in order to buy our dream home. Thoughts?