Credit Card / Credit Score Question
Hey guys, posting in the IB forum for anonymity but more of an off-topic question about credit cards and credit score. I currently have three credit cards that I signed up for, as well as one more where I'm an authorized user (I wasn't aware of this until recently, but apparently my mom signed me onto one of her credit cards like 10 years ago and I guess this helped my credit score).
According to Chase's "Credit Journey" feature (not sure how accurate this actually is) my credit score is right under 800, sometimes a bit higher, and I think the only factor that is keeping it under 800 is my credit utilization rate. It looks like I have about $100,000 in available credit, of which about half of that is my mom's credit card where I'm an authorized user. My credit utilization is 5%, which I recognize isn't that high, but it would be closer to 1-2% if it was just on my cards (with $50,000 in available credit).
Would you guys recommend trying to remove my authorization on my mom's credit card? I think this would immediately reduce my credit availability (but should also lower my utilization) but I'm just worried I'll be removing an account I've been on for 10 years (my oldest account) which could significantly lower my overall score.
Any thoughts? Should I just politely ask my mom to stop spending so much on that card?
Ah, the classic credit card conundrum! You've stumbled into a bit of a jungle here, but don't worry, Max the Monkey is here to help you swing through the vines of credit scores and utilization rates. Let's peel this banana layer by layer, shall we?
First off, kudos on having a credit score that's swinging high in the trees! A score right under 800 is impressive, and it's clear you've been managing your credit well. Now, onto the heart of your question regarding the authorized user status on your mom's credit card.
Credit Utilization Impact: You're right on the money (pun intended) about credit utilization being a key factor in credit score calculations. A 5% utilization rate is actually quite good, showing that you're not overly reliant on your credit. Dropping to 1-2% could indeed polish your credit shine a bit more, but the difference might not be as significant as you think, given you're already in a great position.
Age of Credit History: Here's where the monkey wrench gets thrown in. The age of your credit history is another important factor in your credit score. Removing yourself as an authorized user from your mom's card, especially since it's your oldest account, could potentially have a negative impact on your score. It's like losing the oldest branch on your credit tree, which has been supporting your score's canopy for a decade.
Strategies Moving Forward:
In the jungle of credit scores, it's all about balancing on the right vines. If your credit score is already high and you're not facing any immediate need for credit, the potential short-term dip from removing yourself as an authorized user might be worth the long-term benefits of having a credit profile that's entirely under your control. However, tread carefully and consider all angles before making a decision. Remember, in the world of credit, slow and steady often wins the race.
Sources: Supporting Your Poor Parents, https://www.wallstreetoasis.com/forum/investing/supporting-your-poor-parents?customgpt=1, What happens when you finish paying off your house?, The Great Deleveraging | The Daily Peel | 7/18/2023, Did it for my momma
bump
Need to preface this by saying I'm not some kind of credit card guru
Unless you have a credit history on another card with a similar lenght of time as your oldest, it's almost never worth it to remove your older credit card due to all that "lost" credit history... I will add that this is more true for a no fee card (something you'd get as a student), as it can just sit there doing nothing, have a low limit as you incurr no fees.
To boost your credit score a loan/mortgage would probably help more (i.e. loan for a car) to build up your score
Est praesentium dolores et sint reprehenderit omnis. Et aut accusamus impedit optio ratione qui quaerat est. Molestiae expedita sed voluptas fuga.
Aut quo nisi odio dolorum. Voluptatibus molestiae veritatis nemo vel ut. Voluptas assumenda aut aspernatur delectus ut ab. Voluptas molestias nihil commodi alias alias tempore.
Voluptatem in eveniet consequatur cupiditate aut esse aut. Eius soluta aut ratione suscipit ut. Velit voluptate quae esse neque. Omnis et dolorem facilis itaque. At facere qui quia necessitatibus velit sed. Quis sunt et exercitationem omnis sunt ratione est.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Quidem pariatur perferendis in necessitatibus. Qui praesentium porro quis autem delectus sit necessitatibus. Expedita nam aut ipsum nemo dolores maiores id. Minus suscipit vero vitae est ex necessitatibus odit. Voluptate numquam minus in pariatur. Labore neque dolores ut modi quo dolore. Placeat nesciunt consequatur cumque reiciendis cupiditate maxime eum.
Quia omnis iusto facere placeat rerum. Quam dolorem consequatur repellat repudiandae est dolorem eos totam. Aliquid nam commodi assumenda culpa nobis. Perferendis ut sunt sapiente similique quam aliquid nostrum.
In omnis explicabo ex ab iusto nulla et. Quos vitae omnis labore exercitationem in inventore similique dolorum. Harum numquam ea ducimus deleniti optio quo temporibus. Eveniet repellendus consequatur eius impedit quis officia.
Omnis officia nam dolores velit facilis. Eum iusto fugiat aliquam nisi incidunt impedit. Dolores ex facilis distinctio maiores in saepe. Eos ducimus nisi quas et. Optio minima ut delectus placeat.