Credit File benefits for an Authorized User??

[Cheryla18]

I am thinking about adding my 20 yr old daughter as a Authorized user to my Cap One card.   How if any will this help improve her Credit Score. 

Cheryl

[vanillabean]

It may not make any difference. It doesn't for me, and I'm married, joint etc.

[Gmood1]

The longer the history, the more of a difference it will make. Especially if they don't have any real credit history to begin with. I've watched it boost my kid and sibling's scores 30 to 40 points.

[Anonymous]

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@Cheryla18 wrote:

I am thinking about adding my 20 yr old daughter as a Authorized user to my Cap One card.   How if any will this help improve her Credit Score. 

Cheryl

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Nobody can answer that because we don't know enough information about the account.  If there are any lates associated with that account, it will harm her score.  If the utilization on that account is high, it will harm her score.

Furthermore, if the card is fairly new (< 3 years in age) then while it won't hurt your 20 year old daughter's score, it won't really help it either.

So what you want to be doing is adding a card that....

      Has no derogs in its history

      Usually reports $0 or a very small balance (or you could make it report this going forward)

      Is at least 5 years old (the older the better -- 10 or 15 years would be even better)

Does this card meet all three of those criteria?

Does your daughter have any accounts on her report yet?

[newhis]

Our cards (DW and mine) are all younger than 3 years, our daughter is AU on a few cards, no other history.

She just got an Amex BCE and they say her score is 770. Credit.com report that all cards are $0.

We started with $500 and $1,000 limits, her first card is $6,000.

Without the AU cards, she would not have a FICO score (no history).

[vanillabean]

I would imagine that an AU card would trigger a FICO score after six months. I am not so sure though that it means the card has any impact on utilization.

[jamie123]

I made my son an AU on my Walmart MC for his 14th birthday. On his 16th birthday I plan on making him an AU on my AMEX card. I'm doing this so that when he goes off to college he will at least have some type of credit score so that he can start getting his own credit cards.

It also gives me opportunities to discuss credit and how it works and what your resposibilities are when you use credit. Having good credit is more important nowadays than in the past when I grew up. So much in life now revolves around being able to make online payments. Even at 14 he uses it to buy online games and there really isn't another option to pay. We are quickly moving to a cashless society IMHO.

[Anonymous]

Is there no age restriction on being an AU?  I didn't know a 14 year old could be an AU.  I figured if one isn't old enough for credit on their own, they wouldn't be old enough to be considered as an AU.

[Revelate]

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@Anonymous wrote:

Is there no age restriction on being an AU?  I didn't know a 14 year old could be an AU.  I figured if one isn't old enough for credit on their own, they wouldn't be old enough to be considered as an AU.

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Since they're not individually responsible (Amex not withstanding), and since giving a kid a credit card for incidentals can be enormously helpful in some situations, think some or even most lenders will indeed issue an AU for a minor.

If I ever have kids I will definitely use it, tying it around credit education.  By the time that happens there will be even more control (parental restrictions laugh) then there is today even.

[newhis]

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@Anonymous wrote:

Is there no age restriction on being an AU?  I didn't know a 14 year old could be an AU.  I figured if one isn't old enough for credit on their own, they wouldn't be old enough to be considered as an AU.

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The age limit for Amex is 15 years, and because they report the 'open date' the date you add them to your card is better to do it when they have 15 years.

I read some people added their small kids (less than 10 years) to some cards, to build credit. I don't think that is needed because most lenders will report the 'open date' the same date the card was open by the primary holder. So if I have a 10 year old card and add my 15 year old, then the card will report as open since the kid was 5 years old anyway. Of course this may change in the future.

I added my daughter to my new cards in USA when she was 16 (Amex and others), so all report as open since she was 16. Her score is 770 and got her first card with good limit for stated income, more than what we imagine. So no need to add your 3 year old kid to your cards. 15 years old is more than enough to build good credit score and some history, that not all lenders count. I'm sure my daughter could not get a Chase or Citi card right now, but in a 9-12 months I'm sure she can get them.