AZEO question regarding an AU account

[Anonymous]

In regards to the practice of leaving a small balance on only one card per month, how does an AU account factor into this? 

My current situation:  My SO and I use her CC (I am an AU) for all joint expenses and I send her half of the current balance every paycheck.  It gets PIF twice per month, but a balance does report most months depending on the timing of the statement cut.  Should I also leave a small balance on one of my cards, or does the AU account reporting a small balance count as my EO in the AZEO equation?

TIA for any insight.

[Anonymous]

Many times an AU account is "ignored" from FICO scoring, so if you use an AU card as your AZEO card the FICO algorithm may see you as having no revolving balances, thus hitting you with a 15-20 point ding.  You can always test this out to make sure if it's during a time you don't plan on apping for anything, but as a general rule it is not advised to use an AU card as your AZEO card.

[CH-7-Mission-Accomplished]

The AU account counts for the one card for AZEO.   I am an AU with my SO and have tested this over a few different months.

[Anonymous]

CH-7, I'm not sure that's the case with all AU accounts, though, so it may not be a wise recommendation to suggest it would work in all situations.

[HeavenOhio]

If AZEO is a necessary thing for the SO, it's best that all AU cards report zero and that the small balance be on a card where she is the primary user. That's because, as BBS says, the AU card may not work as planned.

It sounds like using this card is a major convenience, which is the intended purpose of AUs. If her scores and reports are good by doing what she's doing, don't worry about it.

Testing to be sure wouldn't be a bad thing if you really want to know. You could test:

• The AU being the only card reporting a small balance
• The AU card reporting zero with a primary account reporting a small balance
• The AU card and a primary account reporting a small balance (AZE2, i.e. all zero except two)

[CH-7-Mission-Accomplished]

I have AU accounts from my partner, my mom, my dad and and my best friend.  I opened all of these five years ago right after filing BK.

At various times I have had all of my personal cards report a zero balance just to see the effect of the AU's reporting a balance.   There was no score drop for all of my personal cards reporting zero (with AU accounts reporting balances).   Now one cannot generalize what FICO will do based on one one's own experience, but it's the best we can do if we don't work for FICO!

Just as I got dinged once when one of my AU account primary cardholders did a BT bringing one account to nearly 100%, it was consistent that AU accounts are treated the same.   If FICO is going to count a card being over 90% (balance transfer) they are certainly going to count a charge showing a small balance for AZEO.

Also one of the AU accounts I'm on had a past negative history about five years ago (two 30-day lates).   On each of my AU accounts the history BEGINS when I'm added so past history does not enter into FICO's calculation.   So what happened in the past doesn't matter with that AU card, but everything going forward does.

AU's can help or hurt you.   Their best use is addiing to the AAofA and padding utilization.   The four AU's I had were one from my mom (now dead) that was an old account, one from my dad (now dead) that was old but only an 8K limit,  one from my spouse that's a 25 year old account, has a 50K limit and had two 30 day late payments five years ago, and one from my best friend, the account opened in 1989, 30K limit, never any lates but gets used each month for maybe 2K reporting on a 30K limit.

These AU accounts work just like my own primary accounts.

The two accounts from my (dead) parents now show terminated but they add to my AAofA.   All of the acconts begin reported history (30/60/90) count from the date I was added and show the actual date opened by the original cardholder.

This idea of an underwriter making you remove AU's from your credit report is absurd.   The most they could do is make you close them in which case the AU accounts go to a zero balance (not matter what the real balance is) and you get the benefit of the account aging for 10 years after the date of termination of AU relationship.   And "terminated" is not a pejorative term in FICO.   It just means "terminated the AU relationship).

[Anonymous]

Thanks for the replies, the motivation for my post was pure curiosity.

My SO has excellent scores (800+) last she checked, and I'm in the process of rebuilding.  Me being an AU has two advantages, one being a huge convenience in handling our joint expenses, and the other being a boost to my scores.  Shortly after being added to the account, my BK13 from 2011 and all of my old CO accounts completely fell off all three of my reports.  My scores jumped significantly and I was able to get approved for two new cards with sufficient CLs.  I am preparing for a CO REFI, HELOC or HEL depending on multiple factors, probably towards the end of this year and looking for ways to maximize my scores.

Again thanks for the insight.

[HeavenOhio]

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@HeavenOhio wrote:

If AZEO is a necessary thing for the SO, it's best that all AU cards report zero and that the small balance be on a card where she is the primary user. That's because, as BBS says, the AU card may not work as planned.

It sounds like using this card is a major convenience, which is the intended purpose of AUs. If her scores and reports are good by doing what she's doing, don't worry about it.

Testing to be sure wouldn't be a bad thing if you really want to know. You could test:

• The AU being the only card reporting a small balance
• The AU card reporting zero with a primary account reporting a small balance
• The AU card and a primary account reporting a small balance (AZE2, i.e. all zero except two)

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I got this backward. Somehow I read that you were the primary and the SO was the AU. The small balance should be on a card where you're a primary user. If you want to test, your score would be the subject.