Credit Card Authorized User and Large Credit Score Drop - AAoA?

[Anonymous]

Hi everyone...

Background - my husband moved here from the UK 4 years ago.  His only credit in the US has been being an authorized user on my Visa which I've had for 15 years, and he's been authorized for 4.

Back in April, I opened a Target credit card and put him as an authorized user.  My credit score took a small dip but it was high anyway and is still 809, which I'm happy with.  But my husband's credit score totally tanked, from about 750 to 675.  Part of this could be utilization - we shop at Target a lot and although we pay in full every month, the utilization looks high since the credit limit is only $700.  So I started paying off the bill twice per month so the balance never gets very high.  This helped a little and his credit score went up 10 points last month and is now sitting at 685.  I'm wondering if AAoA is playing into this as well, given his limited credit history.  His credit reports have only these two accounts on them with perfect payment history.  We checked all 3 to make sure nothing weird is there.

If this is the case, will it help if I remove him as an authorized user?  We are house hunting and this drop in score has happened since our mortgage preapproval, so if we find the right house, I don't want to get screwed.  I'm just not sure if the damage is done or if I can remove him as an authorized user on the Target card and erase any record of that account from his credit report to hopefully bump him back up at least over 700, if not closer to the 750 mark.  

Thanks so much for any advice!!

[vanillabean]

Welcome!

The AU thing won’t matter much. The dilemma with your joint mortgage application from a lender’s perspective may well be that your husband has shown no credit responsibility for the simple reason that he has no credit of his own. Unless there are installment accounts present?

[Anonymous]

Thanks for your reply.  No, he has no installment loans.  

I guess my question is, if being an AU doesn't matter, why did his score drop 75 points immediately after he became an AU on my Target account?  There is nothing else on his credit report except being an AU on my Visa, so I think the drop must be to do with the Target card.

We've already been preapproved for a mortgage, so there is actually no issue there.  My worry is that when we go to actually finalize it, the lender will see that his score has gone down and give us a worse rate.

[vanillabean]

Utilization has no history. When that is said, it's unlikely his score will improve much when he has no credit of his own. As a general rule, people looking for a mortgage should keep their credit history very quiet. For people with a thin credit background, it ironically tends to improve the score to add a card. But wait, until you have heard from others reading this!

[Anonymous]

Yes the AAoA drop matters (although not as much as utilization) so taking him off the card could help in the short run.  It varies by lender whether they will also remove the history of the credit card but apparently most do.  If they don't, once he's no longer an AU, he can dispute with the CRAs about the account showing up.