Joint credit cards and my credit score
February 10, 2013 12:49 PM   Subscribe

Credit experts: When I enrolled in college, my father added me onto a new credit card to have at my disposal. Now it's becoming an albatross.

I am now many years out from that, and trying to optimize my credit. Unfortunately the card is still on my credit report (presumably my name is on the account), even though I haven't touched it personally in over a 15 years and don't even have the card, and my father has been the only user. Up until recently, the card was in excellent standing, and with a revolving balance and utilization ratio in the neighborhood of 15%. I let that go based on the notion that any negative impact on my overall credit might be marginal at those levels, and having an aging, regularly used account in good standing may even help. My other cards have limited utilization ratios. For reasons I'm not privy to, my father has decided to escalate the revolving balance on the card to closer to 60% (with a credit limit of about $20k). This is considerably increasing what creditors will see as my overall net utilization ratio. I'm uncomfortable prying into why he's carrying a month-to-month balance on a card like that in the first place, or how much the interest he's paying even is. My question is: at this point, if I can't convince dad to reduce utilization on this card to "optimal" levels, should we apply to take my name off the card (he would be fine with that and suggested it), or would that lead to potentially some other hit on my credit in the vein of a credit inquiry and the alleged harm done by closing accounts. I'm not so concerned about having this account fall off my report in 10 years if it's closed for what it's worth.
posted by drpynchon to Work & Money (11 answers total) 2 users marked this as a favorite
Are you an authorized user or an actual co-applicant? Like, is your name printed on the card itself? It sounds like the former to me, but I want to be sure.

(Also, in general, I recommend going to Credit Boards with complicated "how will various scenarios change my credit rating" questions.)
posted by SMPA at 1:03 PM on February 10, 2013

Authorized user as reported by the credit report. I know I should probably go to Credit Boards, but hoping I can get a rough answer from the hive mind without needing to dip toes into uncharted and somewhat intimidating forums.
posted by drpynchon at 1:19 PM on February 10, 2013

Get your name off the card, pronto. It's not only limiting your credit levels, it's also a financial disaster in the making: heaven forbid, but if your father was to drop dead tomorrow you are totally liable for the entire current balance on that card.
posted by easily confused at 1:25 PM on February 10, 2013 [3 favorites]

Authorized users are not typically liable for the balances on credit cards. I would recommend calling the card issuer together and finding out whether you're listed as a joint holder (meaning joint responsibility for debt) or an authorized user (can use and charge, but you don't have financial responsibility).
posted by Verdandi at 1:41 PM on February 10, 2013 [4 favorites]

My husband was in a very similar situation, and asking his dad to take his name off the account improved his credit significantly. If there are any negatives to doing so, they will be far outweighed by the positives.
posted by muddgirl at 2:12 PM on February 10, 2013 [2 favorites]

If you're just an authorized user I see no reason not to get your name removed, but I'm not sure any of this ought to be counting against your utilization ratios anyway, so.
posted by SMPA at 2:20 PM on February 10, 2013

Even if your dad does pay off the balance, I'd encourage you to get your name off the card or close the account anyway. The short-term and relatively minor credit score effects caused by closing the account are far outweighed by the uncertainty caused by having a credit account that you don't control. In our case, we didn't discover this account until we started the process of buying a house, which added to the stress and headache of an already-stressful process. Better to get control of these things now rather than when you really need to and don't have time.
posted by muddgirl at 2:24 PM on February 10, 2013

Cancel the card, and make sure your father pays the balance down (up to and including making a payment if it gets close to the due date). Simple as that.

Don't worry too much about the actual balance and utilization - People tend to worry disproportionately about the minor things that will cost you a point or two, while ignoring the great big elephants (like the fact that you have your credit linked to someone over whose spending you have zero control).

As long as the payment history stays good, this will really only hurt you in the sense of having more outstanding debt relative to your total assets (so will basically vanish once it gets paid off). But the real problem here you need to solve ASAP, and close that account 8am Monday morning.
posted by pla at 2:29 PM on February 10, 2013

Any possible benefit you get from being on a longstanding card will be far outweighed by gyrations in the credit being utilised. Get your name off the card as soon as possible. There is no possible long term benefit in being linked to someone else financially in this way when you don't need to be, and many, many potential pitfalls.

Seriously, you may take a minor hit which can easily be repaired (like a year, max, of regular repayments and a good credit/utilised ratio on your own account), but it's far more likely you'll take a major one if anything goes wrong with whatever your father is doing. Up to and including repaying the full amount, if you're a co-signer.
posted by Happy Dave at 3:00 PM on February 10, 2013

I was in exactly the same position. Though I was an authorized user, it kept showing up as my credit card, even after I no longer ever used it. I contested it with the credit bureaus, and after several contestings the bank went back to the original paperwork and saw they had coded it wrong and had me as a co-signer. They changed their reporting and it went away.
posted by procrastination at 4:09 PM on February 10, 2013

Authorized users are not typically liable for the balances on credit cards.

This is not always true, especially if your relative/parent is fiscally irresponsible. Trust me. They will come after you.
posted by corb at 8:29 AM on February 11, 2013

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