How Do Authorized User Accounts Affect FICO scores?

[TMB_]

Thanks for pointing this out.

[Anonymous]

@TMB_ My pleasure. You may wish to read the scoring primer linked below. When I get the time I'm going to expand the section explaining this penalty.

You can always check at the bottom for the last date revised for each post. As we learn more I continue to update it.

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/General-Scoring-Primer-and-Version-8-Mas...

[Wavester64]

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@Remedios wrote:

Because AU accounts "count" on older scoring models, most lenders will ask you get yourself removed during the mortgage process, because they want to see your score and how you manage your credit, not how someone else manages theirs. 

For CC lending, most major lenders will "strip" AU accounts. That's why you will not get approved by Chase if you have a 30 year old AU card, and one that's 6 months old in your name. 

The purpose of AU accounts under normal circumstances is to allow members of the same household to continue sharing finances if that's what they chose to do. 

For scoring purposes, its good for artificial AAoA inflation, but again, in order to properly asses the risk applicant presents, the algorithm will often ignore it.

Utilization wise, they can help, but that's only when you're looking at your own score. When lender looks at it, they can tell what's what. 

They are nothing but a crutch unless again we're talking about members of the same household. At some point, you need to build your own credit, and sooner you start, better it will be for you. 

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Question for you @Remedios : Most of the time a person wants to be an AU on another's account (say P2) because their credit is not strong say. And thus if the primary user's credit is good, and maintains a certain card diligently, it has a positive affect for the AU. Now say for instance something different. I'll never be able to get a CHASE card because of the 5/24 rule, but my P2 can and I have them get the card and put me as an AU and I maintain the card 100% (diligently) but say my P2's maintenance of her other cards starts being poor, does that affect my credit at all since the card we share is in perfect standing? I am thinking it *shouldn't* have any negative affect, but then again...

[Remedios]

Anything that happens with AU card will affect you the same. If utilization goes up, you will end up with scoring penalty, negatives, same.

The "AU doesn't really count that much" is only applicable for application purposes. 

[Wavester64]

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@Remedios wrote:

Anything that happens with AU card will affect you the same. If utilization goes up, you will end up with scoring penalty, negatives, same.

The "AU doesn't really count that much" is only applicable for application purposes. 

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But if I manage the 1-card that I am an AU on, but I manage it as the primary and its PIF each month, it shouldn't matter if the P2's other cards tank say - it shouldn't affect me since I am on AU on the one card that is PIF each month, right? 

[Remedios]

Only cards on which you're authorized user have effect on your CR. 

Cards that arent "shared" have no influence on your report because they arent on it. 

[Anonymous]

Im an AU on 2 cards (one of them for over 15 years) and neither impact my UTI or total card balances. I wonder why?

[Anonymous]

@Anonymous How do you know this? Are you relying on a CMS? If so, you cannot conclude that from CMS frontends.

[Anonymous]

@Anonymous   I'm looking at the monthly FICO reports is all. So those balances or available credit on AU accounts wouldn't show up there, but would show elsewhere?  They aren't factoring into balances or UTI on anything I have access to. 

[Anonymous]

Most CMS front ends do not include AU statistics. Experian actually has two places that show utilization one with and one without.

This is no indication whatsoever as to what the algorithm is actually doing that created your score.

If you’d like to know whether or not your AU cards are counting, there’s an easy test to perform. Have all your AU cards report zero balances while maintaining at least one balance on a non-AU card.

If you see a significant score drop, 10 to 15 points, they are counting on version 8 and forward. No matter what, they’re counting on fico versions prior to 8.

For more basic information read the following:

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/General-Scoring-Primer-and-Version-8-Mas...