to AU or not to AU

[Anonymous]

I am an authorized user on my mothers credit card since 2001, when I went away to college. I no longer even have a physical card, but am still listed as an AU on her account.  Here's the thing... its a really old card... basically been open since I was 6 years old so it lists my credit history as 20 years long on my reports

I pay approx 500-600 a month on my total credit balances...currently 10,031 overall (including my moms card) out of available 23,055 (again including my moms card); however, my mom seems to be charging approx this much monthly as they are renovating their home.  Is the hit on usage worth the length of time the card is reporting, or am I better off taking my name off.

Looking to purchase a home in Nov/ Dec of this year... but might postpone until latest March of 2010.  Want the best mortgage rate possible. 

Thanks in advance!!!!! 

[Lel]

What is the CL on your mother's card, and how much of that is being used?  If you were removed as an AU, what would be your oldest credit account and what do you think your average age of accounts (AAoA) would be?

If your mother's card is responsible for the (relatively) high amount of utilization (e.g. $9000 on a $10,000 CL card), then being removed as an AU might be beneficial because your overall utilization would go down, even though your total available CL will go down as well.  Any benefit will be offset by the drop in your AAoA and length of credit history.

If, however, the utilization on your mother's card is relatively low (e.g. $500 out of a $10,000 CL), then it would be better for you to remain an AU, because in addition to keeping your higher AAoA and length of credit history, the low utilization of that card is actually diluting your overall utilization on your personal cards. 

[Anonymous]

without my moms card my overall available would be 10,055 with usage at this point being approx 4955... at least on credit reports.. i have made some recent payments and am around 4750

her card has a 13,000 limit with approx 4800 usage...

my oldest card would then be only 5-6 years old.... average maybe 4 years

thanks for the overview of how the numbers all play out 

[Lel]

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tresa03 wrote:

without my moms card my overall available would be 10,055 with usage at this point being approx 4955... at least on credit reports.. i have made some recent payments and am around 4750

her card has a 13,000 limit with approx 4800 usage...

my oldest card would then be only 5-6 years old.... average maybe 4 years

thanks for the overview of how the numbers all play out 

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So the utilization on your personal cards is around 47%; adding your mother's card to your mix puts your utilization at 41%.  The difference in utilization percentage is not significant, but you're benefiting from the account age.  In this situation, it's better to stay on her card as an AU.

But make sure she tells you if she's about to spend $10,000 on new granite countertops..... 

[RobertEG]

Overall, it sound like the AU is benefitting you.  But the lenght of credit history is only 15% of FICO, while payment history is 35%.  If mom lets a payment slip, of which you have no control, it could add a derog to your CR that would wipe out  your AAoA advantage overnight. 

% util is 30% of FICO, so if mom does buy those new household things and drives the account % util up, again over which you have no direct control, you will suffer more than the AAoA advantge.

It all depends upon what mom does.