Authorized Account Users

[CreditBob]

Authorized account users are no longer factored into the fico score. For those parents that nwant to help their children the best thing to do is have them get a credit card when they turn 18. If it's a perosal loan or a vehicle loan you will msot likely need to be a cosigner on the account. At the same tiem that theyb are seeking new credit there are two things. One, have your child get 1 or 2 credit cards when they turn 18. Second, the creditors or lenders such as a bank or credit union, are looking at saving habits. So have them put away money into their account because it shows financial stability.

[Anonymous]

I wonder how this might affect me.  My husband and I have been married for 42 years.  Our credit history runs 32 years.  On our latest report, there is a mix of accounts listed as Joint, Individual or Authorized User.  I say Our latest report but in fact, it is listed in my husbands name not my name. 

When we purchase something, it doesn't matter to us which name it's in...the payment comes out of our joint checking account.   It sounds like something like this is going to hurt women like me who do not work outside the home. 

[MidnightVoice]

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lilacteapot wrote:

  It sounds like something like this is going to hurt women like me who do not work outside the home. 

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Yes.

There are many threads on this subject, along with advice and suggestions.  For example, joint.shared is good - it goes on both scores.

AU can be changed to joint in some cases.

It might be worth looking at your own Credit report to see what is what.  Be prepared for the worst!!

[fused]

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CreditBob wrote:

Authorized account users are no longer factored into the fico score. For those parents that nwant to help their children the best thing to do is have them get a credit card when they turn 18. If it's a perosal loan or a vehicle loan you will msot likely need to be a cosigner on the account. At the same tiem that theyb are seeking new credit there are two things. One, have your child get 1 or 2 credit cards when they turn 18. Second, the creditors or lenders such as a bank or credit union, are looking at saving habits. So have them put away money into their account because it shows financial stability.

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AU accounts are still factoring in FICO scoring. FICO 2008 has not launched.

[haulingthescoreup]

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@Anonymous wrote:

When we purchase something, it doesn't matter to us which name it's in...the payment comes out of our joint checking account.

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Which is what the AU status originally reflected, and that's why it was perfectly justifiable to grant the AU that credit history. Just because one member isn't actively out in the employment marketplace, bringing home a payment, doesn't mean that s/he isn't fully participating in the family's financial management--in fact, they're often the one in charge.

It started getting a little shaky when well-meaning family members started adding on 18-year-olds, etc to help them get some history, but at least that was within the family. What tore it up was a lucrative mini-industry which started allowing customers to become AU's on the cards of perfect strangers at a nice fat fee. Once greed took over, the assumptions underlying AU status were corrupted.

Today's trivia, learned in a classics course eons ago: the classical Greek word for household is oikos. This is the root of the word "economy." So, the household was (and should still be) considered the foundation unit of economics.

[MidnightVoice]

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haulingthescoreup wrote:
So, the household was (and should still be) considered the foundation unit of economics.

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I agree.  And now we have to do joint, rather than AU.  For us, that has worked out OK, and everything we want as joint is joint, so all is good.  And I work on both sets of credit scores to make it OK for both of us if the unmentionable happens and one of us gets run over by a random SUV 

[Anonymous]

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haulingthescoreup wrote:
 Just because one member isn't actively out in the employment marketplace, bringing home a payment, doesn't mean that s/he isn't fully participating in the family's financial management--in fact, they're often the one in charge.

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And that's exactly the situation here.  I have been in the workforce at times over the course of 42 years but I now have the luxury of being home and I took it.  I handle all the finances and permission must be gotten from me, by him for any purchase.  When registering cards online, I set the password, I provide his mother's maiden name, I set and answer the secret question.  I call the 800 number to activate new cards. I provide my email address for all correspondence, not his.  If I were to drop dead tonight, he would be in a pickle.  I do keep records of all this info but he doesn't really understand it or want to.

One thing I did do after reading some horror stories of widows, was start applying for and getting credit cards in my own name, with him as an authorized user.  I started doing that about 15 years ago which is one of the reasons we have so many accounts. 

[haulingthescoreup]

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lilacteapot wrote: One thing I did do after reading some horror stories of widows, was start applying for and getting credit cards in my own name, with him as an authorized user. I started doing that about 15 years ago which is one of the reasons we have so many accounts.

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Now, that's great, because that's going to help you bunches. The fact that you already have 15 years in your own name will mitigate a lot of the damage from losing the AU history! How are the credit limits on the cards in your own name? With good usage patterns and high CL's on those, you might not take that much of a dent after all. Nice foresight.

[smallfry]

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@fused wrote:

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@CreditBob wrote:

Authorized account users are no longer factored into the fico score. For those parents that nwant to help their children the best thing to do is have them get a credit card when they turn 18. If it's a perosal loan or a vehicle loan you will msot likely need to be a cosigner on the account. At the same tiem that theyb are seeking new credit there are two things. One, have your child get 1 or 2 credit cards when they turn 18. Second, the creditors or lenders such as a bank or credit union, are looking at saving habits. So have them put away money into their account because it shows financial stability.

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AU accounts are still factoring in FICO scoring. FICO 2008 has not launched.

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Yep and won't for some time.

[Anonymous]

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haulingthescoreup wrote:
Now, that's great, because that's going to help you bunches. The fact that you already have 15 years in your own name will mitigate a lot of the damage from losing the AU history! How are the credit limits on the cards in your own name? With good usage patterns and high CL's on those, you might not take that much of a dent after all. Nice foresight.

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Right off the top of my head, I have $22,000 CL on one, and at least a total of $40,000 CL on 3 others.  Besides these I have accounts with places like Mattress Discounters, a furniture store etc. all of which were paid on time and in full in the last 5 years.