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When I was in college, my dad added me as an authorized user on his credit card. My understanding was that I would not be legally responsible for this card and that it would not appear on my credit report. I graduated a few years ago and am working full-time and paying rent, utilities, medical bills etc. I have tried to apply for my own credit card but keep getting rejected, even though my credit score is in the 700s. I ended up signing up for a card with an annual fee and a credit limit of only $300, in an attempt to build my credit history.

Today I ran a credit report and was surprised that my dad's credit card appeared. Now I'm wondering if this is the reason I can't get a credit card of my own. My dad pays his balance off every month, but the amount he spends per month is often higher than my monthly salary (sometimes closer to my yearly salary...). If credit card companies think I'm responsible for that, I can see why they don't want to give me a card!

Is it true that this is the reason I haven't been able to get my own credit card? If I ask my dad to remove me from his account, will I have to wait for a while for this to fall off my credit report?

Response to comments: I am in USA. The credit card companies said they were rejecting me due to my lack of credit history, but also told me the credit score they received for me was in the 700s. My credit report did not include my credit score (I thought they usually don't?) but the last time I checked my credit score it was 720, I think. My credit score included my own, low-credit-limit card and my dad's card and noted that credit card companies had been requesting my report (including one that requests my report every month for some reason). There were no missed payments and nothing else alarming on there.

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    In your credit card rejection letters, did they give you any reasons for the rejection? – Ben Miller Mar 14 '17 at 3:39
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    Which country are you in? USA? – Aganju Mar 14 '17 at 10:14
  • I ran a credit report and what did this say? Did it have a score? What was that score? – Liam Mar 14 '17 at 11:04
  • @Liam, your credit report doesn't have a score, the score can be available from the bureaus but is separate from the report. – quid Mar 14 '17 at 17:12
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Being an authorized user on a credit card might not even be reported to credit agencies, but if it is it may have a small benefit for your credit score. In any case, it shouldn't hurt your chances of getting a credit card.

As an authorized user, you have shown that you have experience using credit and that your dad trusts you enough to allow you to use his card. This only gives a little insight into how likely you are to pay off your own card. Now that you do have a credit card, albeit a card with a low limit, I think it will soon be much easier for you to get the card of your choice.

  • Hmm interesting... in the comments on the article you shared it looks like other people have had problems similar to mine. It's frustrating that there doesn't seem to be a straightforward answer on this. – ale Mar 14 '17 at 20:35
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With your score being as high as it is, it sounds likely that the balance on your dad's card is high enough at the time of reporting to discourage other lenders. You have a few options:

  • Ask your dad to remove you as an authorized user
  • Ask your dad to pay-off the card just before the reporting date. (Have him move his payoff date forward by 5 days at a time until the balance on your credit report is lower. If he has the cash to pay it off in full each month, he probably has the cash to pay it off twice each month.)
  • Apply for your credit card in person at a bank branch. Explain what they will see on your credit report and why they should not be concerned. This is probably the easiest way to get the credit you want. Credit unions are your friend here.
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You can get one free annual report from each of the three major credit rating agencies. It wont tell you what your score is but will show you the items that are on it. I would request each one to see what is on each report.

Considering your high score it may be the card your were applying for. If the card was a higher limit card you may have been considered "High Risk" for a $30K credit limit for example, because they may see you as a new college grad with insufficient enough history to take on $30k worth of risk.

Also, just because you were denied for one credit card company does not mean you would get denied for another one (even within the same company). For example if you were requesting an American Express Platinum card the standards for income, credit history, credit score will be higher than a card like American Express Blue, which typically has lower fees and credit limit.

Keep in mind every time you apply for credit, either a loan or card, your score will take a hit. It is usually about 10-20 points. So if you look at your score and it is 720 today but your "shop" around for the cheapest loan rate at three different car loan companies your score could drop by 60 points! Typically that takes about a year to recover. Credit rating agencies see this as a sort "act of desperation" so to speak because you are possibly getting denied. I think it is flawed logic, but regardless that is how they consider it.

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Is it true that this is the reason I haven't been able to get my own credit card?

Probably. From your question and your edits I would surmise that your income doesn't justify the credit limit you already have access to via your dad's card based on the bank's underwriting guidelines. Your dad's monthly balance may be a factor but I suspect this is mostly about the limit available. Since you already have access to a limit above what the banks' formulas will allow you're being declined in spite of your relatively high score and the perfect payment history represented on your report.

If I ask my dad to remove me from his account, will I have to wait for a while for this to fall off my credit report?

Not if your dad's issuing bank is willing to work with you.

This is what I would do:

  1. Identify the bank requesting your report each month and sever that relationship.

  2. Apply for a credit card from the same bank issuing your dad's card.

  3. If you're declined, call the reconsideration number and explain the situation. You're looking to establish your own independent credit and once approved you will be removed from your dad's account.

  4. Get removed from your dad's account.

but the amount he spends per month is often higher than my monthly salary (sometimes closer to my yearly salary...).

This is your problem. Your score could be 7,000,000 but you don't have income to support the credit you already have access to. Though income is not tracked on your credit report(s) lenders will ask for it and no one will offer you more credit than your stated income will support.

I think you're most likely to get traction with the bank you're already dealing with, because they already have your dad's account and history and the ability to fudge the limits. The goal is to get approved for anything (even a limit $50), once you're off your dad's account you can increase the limit. You may also consider trying, with your dad on the line, to trade some of his available limit for your new account.

At a minimum you need to actually talk to the banks that are declining you. What you think about your own creditworthiness based on your score and your report doesn't really mean anything.

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I will suggest a different possibility than has been considered here.

There are three credit ratings agencies and they don't talk to each other. Lenders frequently only report accounts to one or two agencies and when prospective lenders pull your credit, they pull from only one agency. The result is that you can have a credit rating above 700 at one agency and absolutely nothing at another agency. If your prospective lender pulls your credit from the second agency, they won't approve a card.

The solution is to try at some other credit card companies and see if they will approve your credit. Pull your credit information (though your score will not be available) at all three agencies using http://annualcreditreport.com and see if your existing account shows up at all agencies. Ask your prospective credit card issuers which agency they use (if you talk to someone in person). Find someone who uses an agency at which you have credit.

You are also doing the right thing by opening a tiny account and building credit. This will help you so that in the future you do not find yourself in this situation when you, for example, want a mortgage.

You can also use tools like http://quizzle.com and http://creditkarma.com to monitor your credit and give you advice as you try to improve your score going forward.

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