Authorized User is hurt when Card Owner Consolidates

[Anonymous]

My wife and I are in the midst of paying down and consolidating all of our revolving debt. I happened to notice, despite all my hard work that my credit score has dropped over 100 points in the past 3 months and I've been driving myself crazy looking for a reason. No late payments, no delinquencies, no fraud, nothing bad anywhere on any report. I think I finally stumbled across the reason I had been looking for but it's not remotely what I had expected. My wife consolidated all of her debts onto a single card, to which I am (apparently) an authorized user, and in doing so I believe she actually saw an increase in her credit score. Unfortunately, it must look from my end as if I'd spent a ton of money in a very short time frame and thus my score has suffered a great deal. I'm curious if anyone else has experienced this and has a solution. I fear that having myself removed from the account may hurt my score even more by changing my debt to credit ratio. The card is not quite, but nearly maxed, so I am wondering if removing myself from the account will be better or worse because I may lose the credit limit on that card, but I'd be losing virtually an equal amount of debt. Any suggestions are appreciated. Thanks

[haulingthescoreup]

That's always the drawback to AU cards --you're pretty much at the mercy of the other person's card usage.

Most AU cards allow you to hop on and off pretty easily. You might go ahead and drop off her card for now and see what happens to your score. Even if your remaining total credit limit isn't very high, if your other cards are paid off or nearly so, you'll probably be better off. 100 points is quite a blow --I'd drop the card. You should be able to get back on later.

Another thing to be concerned about is the reaction of your other creditors to this maxed-out card. Even though it's not really yours, creditors are so jittery these days that they might take AA (adverse action) on your other cards --reducing their CL's, raising their APRs, etc.

[Anonymous]

Well it's easy enough to call the company and have myself removed from the card, but would I be required to follow up somehow to ensure that the change is reflected on my credit reports or would it be automatic?

If so, how, with whom, and in what time frame should I expect to see a difference?

Thanks

Message Edited by loonyhat on 08-31-2008 11:00 AM

Message Edited by loonyhat on 08-31-2008 11:00 AM

[haulingthescoreup]

I have jumped on and off of my daughter's BofA card, and each time, they reported the addition and the removal that very day. (BofA's great that way.) On the other hand, I removed her and DH from my Gold card, and several weeks later, it was still on their reports.

So it appears to vary by CCC as to how quickly the update. It might not be until the next time that they normally report. You could try asking them to update quickly.

And then, of course, you have to wait for the CRA's to stir themselves and change the reports themselves.

[Anonymous]

Thus far you have been incredibly helpful and I cannot tell you how much I appreciate that.

Did you notice any change in your FICO score as a result of adding and removing the accounts you have mentioned?

Thanks again.

[haulingthescoreup]

Oh, yes, absolutely! The account was only opened in June, and so was stinky new. Each time it went on, my score dropped, and each time it was removed, it rose again.

I had a score increase last October when I added on as AU on an 18-year-old account of my husband's. But at times, it has hurt my scores, as he seems to whip out the card three days before it reports balances to the CRA's, so that shows up on my reports as an additional account with a balance.

His scores (which are indecently high, up in the 800's) dropped when I added him on my Gold card, as it hurt him to have an account less than a year old. And now that I've dropped him and our younger daughter from the card, I suppose that if AmEx ever gets around to reporting this, his scores will rise again. And my daughter's will probably rise as well, because as a charge card, it doesn't help with util, and it's also a newish card.

AU accounts can definitely be mixed blessings! There needs to be a lot of forethought when deciding whether to do this.