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Authorized User Card Helping or Hurting?

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Authorized User Card Helping or Hurting?

Hey everyone - new member here. I've found these forums very helpful just by sifting through the existing threads, but I wanted to see if I can get some input about my specific situation. I'm an authorized user on my mom's Kohl's card and have been since I was a teenager. The card is 18 years old and she's never missed a payment, so I've always figured the card was helping me. Recently though, I've been wondering if the length of credit history is really worth it since the card stays around 60% utilization (currently $1850 on a $3000 CL). I mentioned something to her about this maybe a year ago, and she responded that she knew it was an issue and was actually going to really start working to pay it off. She made maybe 2-3 decent payments, and then went right back to paying the minimum. I assume this card has a very high interest rate since it's a store card and lately the balance hasn't really been decreasing at all in spite of her payments. So I'm wondering if this account is worth keeping or if I should remove myself as an authorized user. I currently have a 26% overall utilization (including her card). I do have one card of my own with a high balance right now due to a recent emergency, so I know dropping her card won't reduce my overall utilization by a huge amount. But isn't the utilization on each individual account also a factor that contributes to your credit score?

 

Without her card, my oldest CC is 5 years old. I do have a few new accounts though, so my AAoA without hers will be pretty low. 

 

To simplify: Capital One Kohl's card, 18 years old, 100% payment history, 61% utilization. Helping or hurting?

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Re: Authorized User Card Helping or Hurting?

In my opinion, the benefit of keeping the card as an authorized user with the increased AAoA and payment history is definitely getting countered heavily by the high utilization on that card in my opinion. Also, authorized user cards really only help in regards to auto approvals with a computer as an underwriter is likely to disregard authorized user accounts.


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Re: Authorized User Card Helping or Hurting?

Welcome, @thisjustin21. Smiley Happy

 

Overall utilization is the most important factor in the revolving portion of one's score. But individual card utilization also factors in. It's determined by the card with the highest utilization.

 

If utilization on your card is over 68.9%, your mom's card isn't hurting your individual card utilization for the time being. If your card is at 48.9% or below, then the Kohl's card is hurting.

 

Note that scoring thresholds are at 8.9% (optimum), 28.9% (responsible), 48.9%, 68.9%, and 88.9% (maxed). The general wisdom is that one's score is optimized when you're reporting under 8.9% overall utilization and 28.9% individual card utilization, although some have reported being dinged with numbers lower than that.

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Re: Authorized User Card Helping or Hurting?

Thank you! That is very helpful. My highest utilization is about 75% right now, so I'll probably just keep the Kohl's card for the time being and see how things look in a few months after my card is paid down. My credit score was 750 before I had to pay 4k in emergency vet bills plus 3k in travel costs (unrelated but happened about the same time) a couple of months ago, so the Kohl's card clearly wasn't hurting me too much before I had to run up my own cards. So now that my credit score has dropped pretty drastically I'm trying to figure out anything I can do to help it in the meantime until I'm able to pay down the balance.

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Re: Authorized User Card Helping or Hurting?

Out of curiosity, where are you getting your score? How much has it dropped.

 

I don't see a way to drastically improve your score other than to bring balances down. There may be a handful of points available if you could make all of your cards report zero to the bureaus other than the two with big balances. You're already at 26% overall utilization, which is good.

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Re: Authorized User Card Helping or Hurting?


@thisjustin21 wrote:

 

Without her card, my oldest CC is 5 years old.


What's much more important than the age of your oldest CC is the age of your oldest account (whether revolving or installment, closed or open). 

 

Not counting the AU account, is the 5 year old CC your oldest account?

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Re: Authorized User Card Helping or Hurting?

My oldest accounts overall are student loans opened in 2009. Two closed, one open.

 

I primarily check my FICO scores on my online account portals (Wells Fargo, Amex, etc). I also check CK but I understand those aren't real scores. My most recent FICO scores are 710 Transunion, 707 Equifax, 695 Experian (that one is not as recent as the others). They had initially dropped from ~750 to ~670-685 when I first had to make several large charges in a short period of time, but they're starting to recover now, slowly but surely. I know those aren't bad scores, but I'm just concerned about the drop since I plan to apply for a mortgage as soon as I can in the next few years. But realistically I can wait a while to give my scores time to optimize.  

 

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Re: Authorized User Card Helping or Hurting?

You have a loan opened in 2009 as your oldest account.  Even if it were closed tomorrow, it would continue to age and stay on your reports through 2028.  The age of the AU account is nice, but it is not helping you that much, since you already have a 9-year old account.

 

The best thing you can do is to pay off all your cards to zero.  This is a good tactic because it will help you discover whether the AU card is being counted at all by FICO 8.  There's a chance it might not be and the only way to know for sure is to pay all of your cards (the ones in your name) to zero.  Could you do that?  Pay all to zero and keep them reporting zero for at least 40 days?


BTW, how many credit cards do you have now?  When was the last card opened?

 

I wasn't able to see this in your posts, but have you pulled your three credit reports in the last month?  If so have you scoured them line by line to see if there are any derogs?  (Lates, collections, chargeoffs, etc.)

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