Does being an authorized user on credit card affect your credit score?

[betsyboop]

So my dad has a BP credit card and I'm an authorized user on it, I'm only in my late twenties and got my first indivdual credit card about four years ago.  Making my credit history really short.  My dad's card is 11 years old which helps my credit score because it shows that I have a history of over 11 years, but he never pays late, but keeps a high balance around $850 on a $900 card.  My total credit cards have an avaialble credit of about $8000 but my balance is zero.  I heard that having a high usage on just one card hurts your score too.  Also I had about $40K in student debt of which I've paid about$2K.  is this hurting my score too?  What should I do?  Should I try to get my dad's card off my report or would it actually hurt my score?  Thanks

[Anonymous]

Hi Betsy,

My guess is that the utilization is hurting your score much more than the age is helping your score.  And you do have four years of your own history - so you're not going back to zero on your age.

If it were me, I would be taken off as an AU.  If my score went down, I would ask to be added back.  But I think you'll find your score will improve.

[RobertEG]

% util; is. otther than payment history. the second most importmt category in FICO scoring.

If the % utiil on any AU authorized acount, particualry with such a very low CL card of $600,  is traditionally above 50% util. I would ditch it immediately as a real peril. and not, benefit, as an AU.

I would ditch it yesterday.

[llecs]

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@betsyboop wrote:

So my dad has a BP credit card and I'm an authorized user on it, I'm only in my late twenties and got my first indivdual credit card about four years ago.  Making my credit history really short.  My dad's card is 11 years old which helps my credit score because it shows that I have a history of over 11 years, but he never pays late, but keeps a high balance around $850 on a $900 card.  My total credit cards have an avaialble credit of about $8000 but my balance is zero.  I heard that having a high usage on just one card hurts your score too.  Also I had about $40K in student debt of which I've paid about$2K.  is this hurting my score too?  What should I do?  Should I try to get my dad's card off my report or would it actually hurt my score?  Thanks

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OP, util is a big deal, but so is the length of history and your mix of credit.

What is your AAoA on that report? Based on your post alone, it looks like this BP is your oldest at 11 yrs. Assuming your SLs are not 11 yrs old, then removing this would hurt your AAoA...by how much you'd have to figure. Plus I'm guessing by your post that it is your oldest TL + oldest CC. On this alone, removing it could very well result in a significant score drop, despite util at nearly 100%. My DW was in the same boat a couple of years ago. Her oldest TL was her father's Citi account and was maxed at 97% w/ a CL of $6300 at the time. Even if DW paid off all of her CCs to $0, except the Citi, the best she could do with overall util was 92%. So, we removed it. Her score tanked over 20 pts.

Mix of credit is another biggie. You mentioned you have other CCs, but if you have at least one other charge card, aside from the BP, then you're OK. If not, you might see a minor ding from that, I'm guessing.

Installment utilization is such a minor part in FICO scoring. Even if you paid them all off today, you probably wouldn't see a gain. I'd keep paying as scheduled, or accelerate payments to avoid interest.

[RobertEG]

I think this thread is a good overview of the pros and cons of being an AU on an old account that traditionally carries high % util, so the decision is, obviously, yours.

In weighing the pros and cons, remember that overall utilization of credit is 30% of your FICO score. while length of credit is only 15%, and credit mix is only 10%.

 In your case, if dad carries a balance of, lets say, $800 a month on his $900 CL card, and your total credit limit is $8,000, that gives you, if your balance is $0 on your other cards,. a % util of  only 10%.  If you maintain low, or zero. % util on your other cards,then this low CL AU card wont have a hgh impact on your overall % util, and you will retain the lesser benefits of increassed AAoA and credit mix.

Since is a relatively low CL card, it is not a high risk for untilization.

I would keep it for now, providing that you have confidence that dad won'f go over limit,. or be late on a payment.  That is the big unknown over which you dont have direct control.

[Anonymous]

Well, that's a lot of good info to let settle in your brain cells. 

If you're still having trouble deciding, then remember that if you take yourself off as an AU and don't like the results, you can always be added back on as an AU. 

On the other hand, if you take yourself off as an AU, and like it, well, there you are! 

And you won't have to worry about what the impact will be because you will know for sure if it's good for you and your FICOness.

[betsyboop]

What is your AAoA on that report?

4 years

My SLs are 7 years old

All of my other CC are major credit cards

Do I just tell the CRA that I want to be removed?  Or do I ask my dad to remove me and then add me back if my score drops too much?

[Anonymous]

Your dad would contact the creditor and make the request.

[smallfry]

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@betsyboop wrote:

What is your AAoA on that report?

4 years

My SLs are 7 years old

All of my other CC are major credit cards

Do I just tell the CRA that I want to be removed?  Or do I ask my dad to remove me and then add me back if my score drops too much?

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Due to circumstances outside my control my AAofA on my Equifax report is 3 years oldest account is 8 years. My score is 781. I would dump that high utilization AU card as your AAofA is high enough to score well. If he can be convinced to bring it under 9% then I would keep it.