Authorized User Intricacies

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Tubpbs
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Authorized User Intricacies

Postby Tubpbs » Sun Oct 25, 2015 6:23 pm

Hi group.

I was hoping that some of you out there have some experience with this...This is just a theoretical.

Let's say I add someone to a given account as an authorized user. After three years, I decide I don't want that person as an authorized on my account any more for whatever reason and I remove them.

Does anyone have first hand experience with how this will report on his or her credit? I know there is variation among lenders and credit bureaus as far as if an authorized user reports at all and then even if it does there are variances in how complete the info is (i.e. CL is or isn't reported, CL is reported but not counted in total available credit, does or does not affect AAoA, etc etc). But I suppose my question is, will that show as a closed account? Will it disappear altogether? Will nothing happen (seems unlikely)?

I am hoping for first hand info and, if it is first hand, the specific lender it was with would be helpful info as well. But, I am also interested in speculation if that is all that is possible.

Thanks.
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takeshi
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Re: Authorized User Intricacies

Postby takeshi » Mon Oct 26, 2015 9:18 am

What are you specifically looking for?

Whether or not a TL is removed varies from creditor to creditor. Some TL's are removed. Some are not. If removal is desired and it does not happen automatically then the former AU can dispute the TL since the AU is not responsible.

Tubpbs wrote:even if it does there are variances in how complete the info is (i.e. CL is or isn't reported,

That doesn't vary. Either the TL reports or it does not. If it does, the same info will appear on the AU's reports. The exception would be creditors like AmEx who report the open date for the AU as the date when the AU was added.

Tubpbs wrote:CL is reported but not counted in total available credit, does or does not affect AAoA, etc etc).

This isn't a matter of reporting but of the scoring model and/or the creditor. There are models (may depend on specifics of the situation) and creditors that may disregard accounts where one is an AU.

Tubpbs
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Re: Authorized User Intricacies

Postby Tubpbs » Mon Oct 26, 2015 12:40 pm

takeshi wrote:What are you specifically looking for?

Whether or not a TL is removed varies from creditor to creditor. Some TL's are removed. Some are not. If removal is desired and it does not happen automatically then the former AU can dispute the TL since the AU is not responsible.

Tubpbs wrote:even if it does there are variances in how complete the info is (i.e. CL is or isn't reported,

That doesn't vary. Either the TL reports or it does not. If it does, the same info will appear on the AU's reports. The exception would be creditors like AmEx who report the open date for the AU as the date when the AU was added.

Tubpbs wrote:CL is reported but not counted in total available credit, does or does not affect AAoA, etc etc).

This isn't a matter of reporting but of the scoring model and/or the creditor. There are models (may depend on specifics of the situation) and creditors that may disregard accounts where one is an AU.


I guess the important part of my question is how it is removed... Meaning does it show as a closed account and stay for ten years or does it just go away...??
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Vermonster
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Re: Authorized User Intricacies

Postby Vermonster » Mon Oct 26, 2015 1:22 pm

Tubpbs wrote:
takeshi wrote:What are you specifically looking for?

Whether or not a TL is removed varies from creditor to creditor. Some TL's are removed. Some are not. If removal is desired and it does not happen automatically then the former AU can dispute the TL since the AU is not responsible.

Tubpbs wrote:even if it does there are variances in how complete the info is (i.e. CL is or isn't reported,

That doesn't vary. Either the TL reports or it does not. If it does, the same info will appear on the AU's reports. The exception would be creditors like AmEx who report the open date for the AU as the date when the AU was added.

Tubpbs wrote:CL is reported but not counted in total available credit, does or does not affect AAoA, etc etc).

This isn't a matter of reporting but of the scoring model and/or the creditor. There are models (may depend on specifics of the situation) and creditors that may disregard accounts where one is an AU.


I guess the important part of my question is how it is removed... Meaning does it show as a closed account and stay for ten years or does it just go away...??


If you close the account it can stay showing the closed account until it falls off. Or it might disappear immediately. This is all CRB and Creditor dependent. If the AU is removed it will follow the same procedure as if the account was closed.

If an AU is removed, and wants it off their report the best bet is to follow up with each CRB and ask to have it removed.
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Tubpbs
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Re: Authorized User Intricacies

Postby Tubpbs » Mon Oct 26, 2015 2:19 pm

LNot to beat a dead horse... I'm pretty sure I follow but a more concrete example.

Let's say I add my sister as an authorized user in an attempt to help her credit (I won't actually even give her the cards let's say). Then, after three years, her credit is a little stronger, some baddies have fallen off and she's getting her own cards with decent limits. It's time to take her off as an authorized user. I don't close anything, just remove her.

You're saying that it will show up as a closed account and stay on there for 10 years as if it were a regular account that was closed? I know I'm belaboring this but I don't want to do this to help and have it hurt later on. Thanks again for all the thoughtful replies.
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CarefulBuilder14
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Re: Authorized User Intricacies

Postby CarefulBuilder14 » Mon Oct 26, 2015 2:58 pm

Tubpbs, I suggest rereading what takeshi and Vermonster said. They have answered your question.

I've no personal experience, but based on what I've read before, takeshi and Vermonster are right; it depends on what the issuer chooses to report.

If an issuer continues to report the account after the AU is removed, then the former AU can request the credit bureaus to remove the account entirely. I think that's the only flexibility an AU has.

A removed AU cannot force the issuer to report the account, so the history may disappear entirely and immediately. A removed AU cannot control how the details of the account are reported. A former AU only has the ability to completely remove an account if the account is reporting.

Keep in mind future creditors don't usually put much value on someone's history as an AU.
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Kevin86475391
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Re: Authorized User Intricacies

Postby Kevin86475391 » Mon Oct 26, 2015 3:31 pm

Tubpbs wrote:You're saying that it will show up as a closed account and stay on there for 10 years as if it were a regular account that was closed?

As I understand it, it may or may not, but that will vary from creditor to creditor. So it MAY stay on her report for 10 years after she's removed as an AU, or it may be removed immediately.

I was an AU on one of my mother's cards when I was in college. After I was removed the account did stay on my credit reports for a full 10 years, but was of course no longer updated after I was removed. I believe it was a B of A account if you're trying to gather info on how specific lenders do stuff.

Tubpbs wrote:I know I'm belaboring this but I don't want to do this to help and have it hurt later on.

I think that's great that you want to make sure your actions don't accidentally cause harm. Having an AU on your accounts certainly is an important responsibility that must be taken seriously.

A couple of points to keep in mind:

-You don't have to add her to all your cards. Cherry pick the best ones, the ones with the longest history, highest credit limits, lowest utilization, perfect payment history, etc.

-Make sure you don't get into trouble (late payments, high utilization, etc.) while you have an AU on any of your cards. Of course you'll want to do that ANYWAY, but it's extra important with an AU because her credit will be on the line too. So if there's any chance that your credit score might start going down instead of holding steady or rising, make sure to immediately remove her as an AU before that happens. Once the account reports as closed, whether it ends up getting removed or not, it should no longer be updated, so your future mistakes or problems will no longer affect her. Of course try to give it as much time as possible to report as closed and stop being updated before anything happens (Ex: Don't remove her as an AU on Tuesday and then miss a payment on Wednesday. Make sure at least one full cycle passes).

Anyway, good luck!

Vermonster
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Re: Authorized User Intricacies

Postby Vermonster » Mon Oct 26, 2015 3:52 pm

Tubpbs wrote:LNot to beat a dead horse... I'm pretty sure I follow but a more concrete example.

Let's say I add my sister as an authorized user in an attempt to help her credit (I won't actually even give her the cards let's say). Then, after three years, her credit is a little stronger, some baddies have fallen off and she's getting her own cards with decent limits. It's time to take her off as an authorized user. I don't close anything, just remove her.


To avoid confusion I will just respond to this, your other statement is incorrect.

There are 2 possibilities
1. The account is removed as it it never existed
2. the account reports as though it is open, but no new updates happen, like if you pause a DVD in the middle of the movie. Eventually this will be take off the report/ignored and you will have the result of option 1.


Basically, it won't hurt her if you have a good account. Give her a year as an AU then remove her as soon as she gets her first card. (take the training wheels off before she starts to rely on them.) Never give her the actual card.
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Tubpbs
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Re: Authorized User Intricacies

Postby Tubpbs » Mon Oct 26, 2015 4:22 pm

Vermonster wrote:
Tubpbs wrote:LNot to beat a dead horse... I'm pretty sure I follow but a more concrete example.

Let's say I add my sister as an authorized user in an attempt to help her credit (I won't actually even give her the cards let's say). Then, after three years, her credit is a little stronger, some baddies have fallen off and she's getting her own cards with decent limits. It's time to take her off as an authorized user. I don't close anything, just remove her.


To avoid confusion I will just respond to this, your other statement is incorrect.

There are 2 possibilities
1. The account is removed as it it never existed
2. the account reports as though it is open, but no new updates happen, like if you pause a DVD in the middle of the movie. Eventually this will be take off the report/ignored and you will have the result of option 1.


Basically, it won't hurt her if you have a good account. Give her a year as an AU then remove her as soon as she gets her first card. (take the training wheels off before she starts to rely on them.) Never give her the actual card.



She's not getting any card, don't worry. Haha.

Thanks everyone for your responses. I appreciate them all. Not sure if I want to do this or even offer to do it, but I figured the more info about it that I had before I made either decision the better.

Thanks again.
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