Build credit for new user

[slvrhwk]

My brother just moved to US as an international student. He got an SSN after getting an on-campus job. I want to help him build his credit. I was wondering if adding him to my Citi Double Cash card as an authorized user will help boost his credit? Please advise. I am posting in this forum because I would like to understand how FICO scoring works. If it's not the right forum, please feel free to move the thread. Thanks!

[Anonymous]

Does he have any accounts already?  (Loans, credit cards, etc.)  If so, what is the age of his oldest account?

How old is your Citi Double card?  Have there ever been any late payments on it?  Would you be able to keep your reported balance very low on the Citi card?

We'd need to know the answers to all of these questions before we'd know whether adding him as an AU would be a good idea.

[slvrhwk]

He got his SSN this past week, so he doesn't have any accounts (loans, credit cards, etc). My Citi DC is about a year old. I have other cards which are older, but this one has authorized user for no additional charge and great cash back reward. I always make on-time payments and my current credit score is 800. Since it's my primary card, my balances are in the 10%-15% range. Once he starts using it, it will probably be in the 20% range.

Based on this info, what do you recommend?

[jamie123]

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@slvrhwk wrote:

He got his SSN this past week, so he doesn't have any accounts (loans, credit cards, etc). My Citi DC is about a year old. I have other cards which are older, but this one has authorized user for no additional charge and great cash back reward. I always make on-time payments and my current credit score is 800. Since it's my primary card, my balances are in the 10%-15% range. Once he starts using it, it will probably be in the 20% range.

Based on this info, what do you recommend?

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The older the AU card the better. Do not use an AMEX card as an AU card because they won't use your account age but will use the date the AU card was authorized.

The reason to add him as an AU is to give his credit report some age. That's why older cards are better. I would suggest making him an AU on 2 cards if you can, then once they are reporting on his credit reports he can app for a card of his own. You can make him an AU and have the cards sent to your address so he never physically needs those cards.

I don't belive any lender charges a cost for adding an AU to your account.

[RonM21]

If he doesn't have anything on file, I can't see why initially doing this would hurt. From there, there are many ways you can begin to build his credit file (all info that can be found here) and then evaluate from there what the AU need is.

[Anonymous]

I agree with the other folks.  You want to add him to the oldest card you have, assuming you can pay the card in question down to a small amount, e.g. $10.  I suggest you do that and then see how that card appears on his reports (specifically look to see what the "Date Opened" is -- you are hoping it will be the same as when you opened it).

What is the age of your oldest credit card?

It sounds like you may not know how to control how a card's utilization reports.  It's easy to spend a lot of money on a credit card each month and still have it report a small amount to the bureaus.  Any of the folks on this thread can walk you through how to do that.

My advice:

(1)  Add him to an old card with a very low balance (but greater than $5).

(2)  Wait until that card appears on his reports and confirm that the Date Opened and Balance is what you want.  You can use a free tool like Credit Karma for pulling his EQ and TU reports (though ignore Karma's scores).

(3)  Go to Credit Check Total and pull his FICO 8 scores using the $1 trial.  If CCT gives you true FICO 8 scores, it means that FICO 8 is counting the AU account.  If he has no scores, it means FICO 8 believes that he isn't a legitimate AU (like a spouse or child) and FICO 8 is ignoring that account.

Note: you can improve the chance that FICO 8 will believe he's a legitimate AU if his last name is spelled exactly the same as yours and if his address is the same as yours.  Identical addresses are not needed but that might help.

(4)  Depending on his FICO 8 scores and income, he should apply for one card of his own.  If he gets approved, wait a month and apply for another.  The cards he applies for should be unsecured cards with no annual fees -- cards he can imagine keeping forever.  Second best would secured cards that have a path for being later "graduated" to an unsecured card.

Each of these steps should be done in sequence.