OliverB

I'm slowly building my credit portfolio and credit score after having emigrated from Canada several years ago, starting with a blank slate. I'm somewhat restricted in the products that I'm eligible for as a result of my limited credit history in the States. I'm an authorized user on all of my wife's cards (and vice versa) but she recently did a balance transfer of almost 16K which she owes, and it's really impacting my credit score negatively as it's consuming a large portion of my avail. credit. I have a Chase card with a 30k credit line extended (I use regularly and pay off balance monthly) along with some smaller 2-3k credit lines with other banks. I'm also an AU on several cards, although for some reason, not all of the cards that I'm an AU on seem to be reporting, which is frustrating. Nonetheless, this 16k debt is dinging my score pretty badly. It probably won't get paid off for another 8-9 months and I'm wondering if I should wait it out and redeem the benefits of paying off in the long run, or drop out now and hope to bounce my score back up to a better credit usage ratio?

mia

I am not confident that I understand the question, but all you need to do is have your wife remove you as an Authorized User for the card on which she is carrying a large balance.

OliverB

Of course, I understand that. I'm just wondering if the longer-term benefit of remaining on the card and having my wife slowly pay off the balance would be more helpful to someone in my situation (limited credit history) than having myself removed for the immediate fix? Absolving myself of this 16k debt in my wife's name would obviously be of benefit to my overall credit score, but I'd also be dropping a 20k credit line from my portfolio. I guess what I'm asking is: what looks better in the long run - drop it right away, or wait for it to be paid off and reflect on my credit history? My wife insists that the on-time monthly payments are going to look better than just dropping off the card, but I'm not convinced. I'd rather not carry this debt for the better part of the next year. I'm also wondering how instantaneous it would be, if I were removed as an AU; would my score automatically reflect this?

OliverB

I'm not sure how accurate this is, but using the CreditWise simulator through CapitalOne, it looks like my score would shoot up by 161 points just by removing myself as an AU - that's assuming that absolving this debt from my credit report would be the equivalent of paying off the debt. I'm not necessarily sure that it works like that though. Unfortunately they won't be reporting to the credit bureaus until next cycle, which is frustrating. I think I'm gonna just take myself off the card.

Critterlynn

You need to compare your total credit utilization as it is now with being the authorized user with the additional debt compared to how it would be not being the authorized user. If your credit utilization goes down significantly it would probably make sense to not be the authorized user even if it means shortening your credit history.

OliverB

It absolutely does drop significantly (a very large percentage in fact) and I've just called and canceled my card and removed myself from that account. It should be reflected on next month's statement cycle. Thanks for the advice!