Add Children to Amex account to establish credit history?
Mar 5, 2013, 10:37 am
#16
Flyertalk Posting Legend Moderator: Credit Card Programs, American Express, Capital One, Chase, Citi, Diners Club, Signatures.
Join Date: Jun 2003
Location: Miami, Mpls & London
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Apparently there are identity theft reasons to do this on a regular basis:
http://www.miamiherald.com/2013/02/2...your-kids.html
http://www.miamiherald.com/2013/02/2...your-kids.html
Mar 14, 2013, 8:43 am
#17
Join Date: Jun 2011
Location: Flyover Territory
Programs: Hilton Diamond
Posts: 687
I added my nephew and two nieces to my Hilton Amex to help them establish credit history. (Could not add my own children on AMEX since none are 15 yet.)
I just had my sister check their credit scores via credit sesame, and she's requesting their free credit reports but for some reason couldn't access them online.
Via credit sesame, the older two had scores of 750 or above. They are ages 21, 19, and 16. The youngest one had no score yet, but we just added her a few months ago.
And this was not AMEX, but I added my 14 year old as an AU on two Chase cards when he was 12. According to CreditSesame, he's got an 827. I know credit sesame is an estimate, but even if they're off by 100 points, the boy has a great start!
And AMEX targeted him for a PRG with a 50,000 point bonus this week
As an earlier poster noted, Chase does not take DOB or SSN, so it is being matched up by name and address. Easy to see how errors on your credit report could occur if they're matching up that way.
Anita
I just had my sister check their credit scores via credit sesame, and she's requesting their free credit reports but for some reason couldn't access them online.
Via credit sesame, the older two had scores of 750 or above. They are ages 21, 19, and 16. The youngest one had no score yet, but we just added her a few months ago.
And this was not AMEX, but I added my 14 year old as an AU on two Chase cards when he was 12. According to CreditSesame, he's got an 827. I know credit sesame is an estimate, but even if they're off by 100 points, the boy has a great start!
And AMEX targeted him for a PRG with a 50,000 point bonus this week
As an earlier poster noted, Chase does not take DOB or SSN, so it is being matched up by name and address. Easy to see how errors on your credit report could occur if they're matching up that way.
Anita
Apr 15, 2013, 6:53 pm
#19
Join Date: May 2010
Location: Rockin' the Bakken
Programs: Several
Posts: 978
I added my brother (16 year old) to my Hilton Amex as well as my Chase Marriott card. Amex requested his SSN and DOB, however Chase did not.
It would seem that if Amex requests the SSN and DOB, this would somehow benefit their credit history even if only in a minor way. As long as it's not hindering something, I cannot see why it would be a bad idea (as long as the AU cards do not have an annual fee). Seemed like a good idea to me to help a younger person to start establishing a credit history without the availability of doing so themselves.
It would seem that if Amex requests the SSN and DOB, this would somehow benefit their credit history even if only in a minor way. As long as it's not hindering something, I cannot see why it would be a bad idea (as long as the AU cards do not have an annual fee). Seemed like a good idea to me to help a younger person to start establishing a credit history without the availability of doing so themselves.
Apr 15, 2013, 10:19 pm
#20
Join Date: Aug 2011
Posts: 93
I think everybody is off base so far as authorized users relate to fico scores. It used to be that your FICO was calculated based on authorized user accounts. People with bad credit discovered this loophole during the subprime housing boom and fico has since closed the loophole many years ago. Authorized user accounts now have no affect on fico. Authorized user accounts do show in the AU's credit report, but without a corresponding established fico score, I'm not sure that it matters.
The FAKO scores like Credit Sesame would show a good credit number because they use very simplified calculations based on the credit report data, but FICO will likely show that your 12 year old with a bunch of AU accounts doesn't even exist.
The FAKO scores like Credit Sesame would show a good credit number because they use very simplified calculations based on the credit report data, but FICO will likely show that your 12 year old with a bunch of AU accounts doesn't even exist.
Apr 16, 2013, 7:20 am
#21
Join Date: Aug 2010
Location: LAS, MPL
Programs: DL Platinum, 1 MM
Posts: 1,324
I think everybody is off base so far as authorized users relate to fico scores. It used to be that your FICO was calculated based on authorized user accounts. People with bad credit discovered this loophole during the subprime housing boom and fico has since closed the loophole many years ago. Authorized user accounts now have no affect on fico. Authorized user accounts do show in the AU's credit report, but without a corresponding established fico score, I'm not sure that it matters.
The FAKO scores like Credit Sesame would show a good credit number because they use very simplified calculations based on the credit report data, but FICO will likely show that your 12 year old with a bunch of AU accounts doesn't even exist.
The FAKO scores like Credit Sesame would show a good credit number because they use very simplified calculations based on the credit report data, but FICO will likely show that your 12 year old with a bunch of AU accounts doesn't even exist.
Apr 16, 2013, 10:47 am
#22
Join Date: Dec 2009
Programs: DL PM, Hyatt Plat, SPG Gold
Posts: 1,082
My daughter who applied for and got a AMEX card on her own this past year says "Member since 82". That's interesting since she was born a few years after that!! My member date obviously carried over to her account.
Apr 16, 2013, 5:12 pm
#23
Join Date: Aug 2011
Posts: 93
Do you know for a fact that AU accounts have no effect on credit score or are you speculating? My son who has been an AU for some years had his credit report pulled for a student rental and was the only one among his friends with a credit report in the 700+ range. Not sure what bureau they pulled.
"A major change to the FICO credit score formula was announced by Fair Isaac Corporation in September 2007. FICO scores will no longer factor authorized user accounts into their credit scoring formulas."
"Adding a family member or friend as an authorized user on an existing credit card account has long been used as a way to establish credit. Many parents added their children as authorized users in order to help them build their credit history."
"However, credit repair organizations have also started using this system as a way to fraudulently sell authorized user account access to consumers with credit problems. This credit repair loophole was part of the motivation for the FICO score change."
Apr 16, 2013, 5:21 pm
#24
Join Date: Mar 2011
Programs: Marriott LT Platinum+Titanium Elite, Hyatt Globalist, AA EXP, Delta Plat, United Silver, AX Biz Cent
Posts: 707
Do you know for a fact that AU accounts have no effect on credit score or are you speculating? My son who has been an AU for some years had his credit report pulled for a student rental and was the only one among his friends with a credit report in the 700+ range. Not sure what bureau they pulled.
Apr 17, 2013, 10:01 am
#25
Flyertalk Posting Legend Moderator: Credit Card Programs, American Express, Capital One, Chase, Citi, Diners Club, Signatures.
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http://www.bankrate.com/brm/news/cc/...d-users-a1.asp
On July 31 [2008], Fair Isaac announced that its latest credit-scoring model, dubbed "FICO 08," will include authorized user accounts when calculating someone's FICO credit score....FICO 08 was originally designed to ignore authorized user accounts, in an effort to stem "piggybacking" on a stranger's credit card and artificially inflating one's score....Fair Isaac said lenders complained that using FICO 08 would inhibit compliance with Federal Reserve Regulation B, which requires lenders assessing a married person's credit risk to consider the credit history of accounts shared by the spouses.
Fair Isaac is keeping the specifics of the new analytic approach secret but says it has found a way to restore authorized-user accounts to the formula but also reduce the impact of piggybacking.
Fair Isaac is keeping the specifics of the new analytic approach secret but says it has found a way to restore authorized-user accounts to the formula but also reduce the impact of piggybacking.
Apr 22, 2013, 9:43 am
#27
Join Date: Jun 2011
Location: Flyover Territory
Programs: Hilton Diamond
Posts: 687
I think everybody is off base so far as authorized users relate to fico scores. It used to be that your FICO was calculated based on authorized user accounts. People with bad credit discovered this loophole during the subprime housing boom and fico has since closed the loophole many years ago. Authorized user accounts now have no affect on fico. Authorized user accounts do show in the AU's credit report, but without a corresponding established fico score, I'm not sure that it matters.
The FAKO scores like Credit Sesame would show a good credit number because they use very simplified calculations based on the credit report data, but FICO will likely show that your 12 year old with a bunch of AU accounts doesn't even exist.
The FAKO scores like Credit Sesame would show a good credit number because they use very simplified calculations based on the credit report data, but FICO will likely show that your 12 year old with a bunch of AU accounts doesn't even exist.
My 14 year old has gotten two mailers from AMEX targeting him for a 50,000 point bonus for a Premier Rewards Gold card. This card is offered to those with excellent credit.
Based on this, I conclude that adding him as an AU has had a positive effect on his credit history and that the loophole is functioning to some degree.
The risk reward ratio of this is very much in favor of just giving it a try.
Jun 3, 2013, 5:22 pm
#28
Join Date: Jul 2012
Location: Beverly Hills
Posts: 713
+1, AU does establish credit history internally with AMEX, most likely outside as well.
I was made an AU on my father's Business Platinum Account in Aug 2011 before going to college at age 18. Parents agreed to pay my expenses, and I felt it would be easier than transferring money, etc (Not to mention all the plat benies for me
). After 1 year of maintaining perfect payments on my father's account, I decided to roll the dice (because Centurion is my end goal ) and apply for the PRG and Delta Gold in September 2012. Was instantly approved for both, AND had them backdated to the original 2011 authorized user date.
I don't know if being an AU necessarily helped me establish EQ, EX, and TU credit history, but it made a huge impact on my SS# with AMEX internally. I've heard rumors that being on a plat. account gives it more weight too, but I don't personally believe that.
Plus, the backdate is priceless for AAoA if you're churning, especially when it increases every time you add any Amex card
I was made an AU on my father's Business Platinum Account in Aug 2011 before going to college at age 18. Parents agreed to pay my expenses, and I felt it would be easier than transferring money, etc (Not to mention all the plat benies for me
). After 1 year of maintaining perfect payments on my father's account, I decided to roll the dice (because Centurion is my end goal ) and apply for the PRG and Delta Gold in September 2012. Was instantly approved for both, AND had them backdated to the original 2011 authorized user date.I don't know if being an AU necessarily helped me establish EQ, EX, and TU credit history, but it made a huge impact on my SS# with AMEX internally. I've heard rumors that being on a plat. account gives it more weight too, but I don't personally believe that.
Plus, the backdate is priceless for AAoA if you're churning, especially when it increases every time you add any Amex card