Authorized User

[Anonymous]

I am an authorized user on one of my parents' credit card.  We all have excellent credit history and scores.  Now they are considering a short sale on one of their homes which will definitely lower their overall credit scores.  Will that affect my score too?

[Scene]

Unless your name is on the mortgage or documents they used to buy the house, then you WILL NOT be affected by the short sale. However if your parents default on the card you are AU or file for bankruptcy, then your scores will be affected.

[Jazzzy]

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@Scene wrote:

Unless your name is on the mortgage or documents they used to buy the house, then you WILL NOT be affected by the short sale. However if your parents default on the card you are AU or file for bankruptcy, then your scores will be affected.

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Always remember that as an AU, you can get the card taken off your report should anything negative appear. Remove yourself as an AU and tell the CRA that you are not an account owner. We were AUs on our son's AmEx. He has excellent credit, but....like most of America...he doesn't pay his monthly balance until he gets his statement. Therefore, a balance reported each month. We wanted to have virtually no utilization showing, so we took ourselves off his card and got the reporting taken off of our reports. Too bad, since it was a 1989 card...but the utilization reporting bothered us, so we decided there was more negative than positive and got rid of it.

[RobertEG]

Scene posted:

Unless your name is on the mortgage or documents they used to buy the house, then you WILL NOT be affected by the short sale. However if your parents default on the card you are AU or file for bankruptcy, then your scores will be affected.

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When account information is reported to an AU's credit file, I know of no mechanism that excludes information based on the AUs status as a principal on the account.

AUs are, by definition, NOT principals on the other consumer's credit history, yet receive that reported history.

How would any reporting be filtered before inclusion in an AUs credit file based on the legal status of account liability?

It would appear to me that the actions on that account that are reported to a CRA would affect the scoring of the AU.

Am I missing some mechanism for evaluating what will or will not be reported to an AUs credit file?

[RobertEG]

Unless your name is on the mortgage or documents they used to buy the house, then you WILL NOT be affected by the short sale. However if your parents default on the card you are AU or file for bankruptcy, then your scores will be affected.

___________________________________

When account information is reported to an AU's credit file, I know of no mechanism that excludes information based on the AUs status as a principal on the account.

AUs are, by definition, NOT principals on the other consumer's credit history, yet receive that reported history.

How would any reporting be filtered before inclusion in an AUs credit file based on the legal status of account liability?

It would appear to me that the actions on that account that are reported to a CRA would affect the scoring of the AU.

Am I missing some mechanism for evaluating what will or will not be reported to an AUs credit file?

[Anonymous]

I am a bit confused with the reply.  Are you stating that my parents' short sale will affect my credit scores even though I am not on the mortgage or any of the documents related to the property?   I am  the AU on only one of their credit cards which they have excellent payment history.  Wouldn't only the actions on that credit card account that are report to the CRA will affect my scoring.

[pizzadude]

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@Anonymous wrote:

I am a bit confused with the reply.  Are you stating that my parents' short sale will affect my credit scores even though I am not on the mortgage or any of the documents related to the property?   I am  the AU on only one of their credit cards which they have excellent payment history.  Wouldn't only the actions on that credit card account that are report to the CRA will affect my scoring.

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If your parents credit card were to be paid late or be closed as a result of the CC taking adverse action because of the short sale, then the late pays or closed account would show on your CR.   Basically whatever happens to this card ( good or bad ) is going to show on your report as long as you are an AU.

[pizzadude]

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@Jazzzy wrote:

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Always remember that as an AU, you can get the card taken off your report should anything negative appear. Remove yourself as an AU and tell the CRA that you are not an account owner. We were AUs on our son's AmEx. He has excellent credit, but....like most of America...he doesn't pay his monthly balance until he gets his statement. Therefore, a balance reported each month. We wanted to have virtually no utilization showing, so we took ourselves off his card and got the reporting taken off of our reports. Too bad, since it was a 1989 card...but the utilization reporting bothered us, so we decided there was more negative than positive and got rid of it.

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Jazz - was this a charge card ?  If so the balances are ignored from a FICO perspective ( except for TU98 ).    Obviously they still show as balances, they are just not included in your utilization.

[Jazzzy]

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@pizzadude wrote:

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@Jazzzy wrote:

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Always remember that as an AU, you can get the card taken off your report should anything negative appear. Remove yourself as an AU and tell the CRA that you are not an account owner. We were AUs on our son's AmEx. He has excellent credit, but....like most of America...he doesn't pay his monthly balance until he gets his statement. Therefore, a balance reported each month. We wanted to have virtually no utilization showing, so we took ourselves off his card and got the reporting taken off of our reports. Too bad, since it was a 1989 card...but the utilization reporting bothered us, so we decided there was more negative than positive and got rid of it.

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Jazz - was this a charge card ?  If so the balances are ignored from a FICO perspective ( except for TU98 ).    Obviously they still show as balances, they are just not included in your utilization.

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Hi pizzadude...it is a charge card. It was probably TU98 we were looking at because we told a mortgage lender we had zero credit card debt...and lo and behold his card showed a $3-4k balance, and it showed in the utilization on our reports. This was in 2009. He's got great credit, and the card is so old it is nice...but it bugged me that the balance showed on our reports.

[pizzadude]

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@Jazzzy wrote:

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Jazz - was this a charge card ?  If so the balances are ignored from a FICO perspective ( except for TU98 ).    Obviously they still show as balances, they are just not included in your utilization.

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Hi pizzadude...it is a charge card. It was probably TU98 we were looking at because we told a mortgage lender we had zero credit card debt...and lo and behold his card showed a $3-4k balance, and it showed in the utilization on our reports. This was in 2009. He's got great credit, and the card is so old it is nice...but it bugged me that the balance showed on our reports.

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Yep, probably so ~ the balance would certainly show on your reports but only TU98 would include the balance in your revolving utilization.