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TPG reader Frankie sent me a message on Facebook to ask about improving his credit score:
You can benefit from adding an authorized user to your credit card account, but there are also some risks involved. Likewise, being added as an authorized user can be an asset or a liability depending on whether the primary cardholder manages the account responsibly. Their account activity can show up on your credit report, so things like missed payments or high balances can impact your score. Fortunately, getting yourself removed from a troubled account is a straightforward process.
In Frankie’s case, I would try to find a way to lower the balance on his parents’ account before he removes himself from it entirely. One option would be to have them open a new card that offers a 0% APR balance transfer. That would help them avoid paying interest on the existing balance (at least temporarily), and would keep that card and its long history active on Frankie’s credit report, so he can maintain the average age of his accounts. The Chase Slate card is a particularly good option, since you get a 0% APR for 15 months and there are no fees for balances transferred in the first 60 days.
If that approach won’t work, then Frankie can get himself taken off the account. As an authorized user, this may be as simple as calling the number on the back of your card and asking to be removed. However, some card issuers only allow the primary cardholder to make such a request, so you might have to get that person to call on your behalf.
Once you’ve been removed as an authorized user, the account may still show up on a credit report (as closed), but the balance should no longer be factored into your credit utilization ratio. In some cases you can get the account completely removed from your credit history, but only if the card issuer requests it. The effect won’t be instantaneous either way, but you should see an uptick in your credit score within a month or two.
Keep in mind that the process is very different if you’re a joint account holder rather than an added user. In that case, you’re equally responsible for any authorized charges, so you (or someone) would have to pay down the balance before you could close the account.
For more on managing your credit score and adding authorized users, check out these posts:
If you have any other questions, please tweet me @thepointsguy, message me on Facebook or send me an email at info@thepointsguy.com.
Source: thepointsguy.com