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My wife and I both filed bankruptcy 15 months ago, and are slowly getting our credit back.

We both got a credit card from Capital One.

Does adding each other to the other's card as an authorized user improve our scores? (Obviously if both account are in good standing.)

Do the limits from the authorized accounts factor in to utilization and payment history?

  • Not the answer you are looking for, but are you looking to go through bankruptcy again? Perhaps you should rethink getting a credit card. – Pete B. Apr 1 '14 at 13:24
  • @Pete, Dan didn't say anything about "again." – Douglas Denhartog Apr 1 '14 at 17:11
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    It doesn't help as much as it used to. Once upon a time getting added as an AU on a card was a quick ticket to a good credit score. FICO caught on, though. As long as the card you're an AU on is in good standing, and isn't maxed out, it will likely have a small positive impact for the AU. – Todd Apr 1 '14 at 18:15
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    @PeteBelford We are both responsible, always paid on time. Bankruptcy was due to being victims of the Meisner Ponzi scheme, where we lost over $100K. He's in federal prison now; but that doesn't really help us... – Dan Apr 1 '14 at 18:33
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The authorized user guest and the host will share the credit reporting of that card (if that card reports on the authorized user's report, you will have to ask the lending institution).

If a negative item gets reported on that card, then it will extend to the authorized user's credit.

Since credit institutions have a dim view of both of you, this won't help either of you. If you guys both have separate cash flow of some kind, then you may be able to convince an actual human at a credit institution to extend some credit backed by the both of you, to help rebuild your credit score so that the all powerful machines may grant you credit in a nearer future.

To answer your main question, I'm going with no.

  • The odd thing is that -- even though since the bankruptcy our reports are nearly identical -- my wife got 2 new pre-approved offers from 2 other banks, for which she successfully applied (and got an extra $3000 of credit). We assumed it was due to her being an authorized user on one of my mother's CC's. – Dan Apr 1 '14 at 4:32
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There is a small beneficial impact of being an authorized user on a credit card. It's not as big as it once was, as FICO regularly adjusts their models and determined at some point that authorized user status wasn't equivalent to being the primary cardholder; but it's non-zero.

It may help slightly for you to make each other authorized users on the other card, but it would likely help more if someone with better credit and thus a bigger credit line would make you an authorized user on their card - particularly if it's an older account.

See Nerdwallet's article on Authorized Users for example for more information, or this Experian Q&A.

Experian also notes that not all credit card companies report Authorized Users, so you may want to clarify that with the credit card company.

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Just to add to the other answers, from https://www.nerdwallet.com/blog/finance/authorized-user-credit-score (mirror):

Because you’re not technically responsible for paying the bills, being an authorized user may not have a huge impact on your credit score. But it helps those with little or no credit history beef up their credit files.

While you’re working on your score, consider applying for a secured credit card. You’ll have to pay a deposit up front if you’re approved. Secured cards allow you to prove that you can manage your own card. Being the primary account holder will have a much bigger impact on your credit score.

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