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May 16 2020

Does using credit karma affect score #Does #using #credit #karma #affect #score



Does using credit karma affect score

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I know this is an old post but I felt it needed one more opinion since I’ve read so many comments about it not affecting your score. I know for a fact that being an authorized user WILL affect your credit score! When you add someone as an authorized user to your account, it will be reported on their account just like it is on yours, including the history prior to them being added. This means if the card is 8 years old and has a late payment, the account will show up as 8 years old with a late payment on their credit. Legally, however, they are not responsible whatsoever for making any payments. You are. This does not stop collectors from contacting them of course.

Removing an authorized user will not affect your credit score, but will affect theirs. If you have a low balance, high limit, long standing account, removing them will probably lower their score. If your credit card has high utilization, late payments, etc. removing them will probably raise their score. I see it as authorized users borrowing your account status and the benefits or consequences of having that account.

I know this from experience. I have 2 friends who have had trouble getting a credit card because they don’t have a credit history. I added them as authorized users on my credit cards, since I have a good credit utilization, history and credit score. A month later, the account showed up on their credit and they were then able to apply for credit themselves. Please NOTE! Adding someone to your credit card account as I have is risky. They may be issued cards in their name and if they use them, you are responsible for any transactions they make. I just happen to have a great deal of trust with these two friends and have made agreements about usage.

ejaboneta’s response was:

What if they have a 800 limit & have used it all up but have a great payment history of the min balance? . If I take myself off now will if hurt my score?

AshleyReynee87’s reply was:

I’m so lost. i didn’t ask to be an authorized user. i don’t use credit enough and now my score is terrible. what can I do. i was building my credit now it seem like it’s impossible

Pepper1128’s reply was:

Does it affect the age of credit if i add myself to one of the wifes cards to up my avail and score. ? or is it like getting a new account? /day 1

zeus1620’s reply was:

Yep. It affects credit score but not all credit bureaus. I was an authorized user on my wife’s credit card. Everything counted from line of credit / limit to age of account to payments, etc.

In fact, when my wife would let credit utilization above 10%, the score would drop. Equifax for example does COUNT authorized user cards as active lines of credit.

But the good news is that you can get yourself removed as an authorized user very quickly. You won’t be able to get your score back quickly though.

ProcrastinatedLoans’s reply was:

It will show on your credit

I am an authorised user on 2 of my wifes credit cards. One of them she gave to me before we were married over 20 years ago. Currently due to changing a password change, our automatic bill pay did not pay the credit card for 2 months obvioulsy lowering both of our credit scores. So I have done a bunch of research to see if this is legal. It appears to be treading a grey undefined line. Any comapny can report to the credit agencies without your authorization. In other words, although it would be illegal for me to do so, I could litteralyy report bad credit to anyone as long as I have their name and address only. What they can not do is pull and see your report without your authorization. So with that said, it has come to my attention that these creditors now use the “aiuthorised users” as leverage or extortion to try and get money out of them if the account defaults. However in these cases, you are not liable for any of the charges and they can not come after you. THey can simply harrass you by making you believe that you are as responsible then the account holder. UNless you are a co signer and gae them your SS# to add your name to the acccount, you are not liable for the money owed, however this will likely (not in every case) be reported on your credit. Good or bad. Is this legal? I dont know. I think it is legal since no company requires your authorization to post good or bad credit information to the credit bureaus. I hope this helps. I evenfound several cases where employees were being harrased by bill collectors because they were at one time an authorised user on the corperate account.

What are we going to do about this? This is obvioulsy a huge oophole in our credit system. Think about it. If I wanted to, today, I could call my CC company, add a enemy to my account, never give them a card or tell them I have ever given them a card, stop making payments, and their credit would be affected at the same rate as mine would be. This seems obvioulsy not only wrong but imorale. However the credit bureaus are facilitating this because in order to report tp the credit bureaus, you have to pay. So guess who makes more money when they report all authorised users? The cr4diut bureaus do? And in turn, the credit companies now have an effective tool to extort money out of people that have no real liability on the charges that were made. This is just a big mess.

ddelor’s response was:

Not sure why you had to determine if that was legal. Ultimately it is SOLELY YOUR responsibility to make sure the bill is paid monthly. even on an automatic payment. Anyone with a checking account should be balancing their checkbooks and checking their balances on a monthlty basis. It has been this way for more than half a century.

With technology, it has made many of us lazy and I’ll be the first to admit that I don’t do this, but I can’t be mad or upset at any company who didn’t get paid because it was my responsibility. This is one of the reasons why I don’t sign up for automatic payments. I set the reminder on my phone calendar which is also attatched to my google calendar so I always get the alerts and emails. I have had it this way so long that I dont’ even need the reminder.

Most of my cards and bills also come in phone apps so I just pay my bills right there from my phone without calling or going to their sites.

No offense, but it’s your own fault that you got 2 months behind. No one elses. There are more than a dozen reasons why your card may not have been paid automatically. I have worked in the banking/billing industry for 10 years.

1) Your card expired or you reported it lost/stolen and you forgot to update all of your companies who you have automatic payments with

2) Your bank blocked the transaction as potential fraud (this happens so very often even if you have had these automatic payments for years with no issue. Sometimes these blocks are random and automatically triggered by the system.

3) There was a glitch beyond your control. But still your responsibility to check.

Bonus: In the event of any of these things happening, banks generally try to contact you in SOME way (email, phone, mail) to let you know you’re behind and most dont’ even report late payments to the credit agencies until you are 30 – 60 days late on a payment. If your email, phone number, and/or address has changed and you didn’t update it, this could also be a reason. By law they don’t HAVE to notify you of anything because your terms of service agreement which you sign when you get the card says that you 1) Won’t sue them in a court of law and 2) That things like this are your responsibilty. They didn’t have to add that part into your contract for it to be true. It’s common sense.

AlexMackk’s reply was:

It would be a bit of a hassle but if someone maliciously added you as an authorized user you could easily dispute it with the credit bureaus and have it removed. You just have to go online or call each of the 3 bureaus. I’ve done that several times with inquiries that have shown up on my credit report without my consent.

49er614’s reply was:

I was added as an authorized user without my permission and it absolutely showed up on my credit score. It also factored into my utilization ratio, quite negatively. I didn’t know for months that I was listed as a user, then it took months for Citi to remove me. I’ve reported it to the agencies but the damage has been done. My score dropped almost 100 points.

thetaphi09’s response was:

Once you removed it, how long did it take for your credit score to rebound? I am in the same situation. My mother made me an authorized user on the accounts with very high credit lines. but zero balanes. it ruined my chance for future credit because it pushed potential obligations to income to the extreme.

Tailgater’s reply was:

This is to Tailgaiter (commenting doesn’t seem to nest beyond one reply)

Tailgaiter – that actually doesn’t make sense. If you were added to accounts with very high credit lines (I assume you mean limits) but zero balances, that would be excellent for you. I assume you mean something like “0 balance / 15,000 limit.” This would make your utilization very, very low – which is excellent for your credit score.

If, however, you were added to an account that looked like this: “14,000 balance / $15,000 limit” – that would indeed be very bad for your score.

Just wanted to clarify that. If your score did go down then there was a reason, but being on a 0-balance / high limit card wasn’t it.

darkblue04’s reply was:

Two Separate Topics

It seems like this thread has split into two separate topics. I thought from the original title, it was meant to address how being an authorized user affects your credit score (based on limits, balances, age, uitlization rate, etc.). The topic has gone into great detail regarding who is liable for payment when an authorized user. I’m not sure I’ve seen a clear answer on the original topic.

I have added my wife to two of my credit cards with high-limits. One has no balance and is kept because it is >15 years old, the other is the card we “use” on a monthly basis because it has a good points program. Both show on CreditKarma under my wife’s name and impacts utilzation, total balance and total limit. I guess I’m trying to find the risk / benefit of doing this. Of course, I need to keep her as an authorized user on the account which we truly use / share, but what about the other no-use, zero balance, high-limit, long-aged account? I’m trying to decide whether to take her off as authorized user or not. She has her own card with zero balance with very high limit as well, so it’s not like I would be taking her down to a low total limit. Thanks

tartan23’s response was:

I don’t have firsthand experience with this so my reply is based on the huge amount of financial advice I’ve been given & what I’ve read. The impact to your wife’s credit probably wouldn’t be too drastic since you mentioned she has her own high limit card and would still have the account you both actually use. The only drawback would be if items in her credit history (her own card, the joint card, any other lines of credit she has) were significantly newer than the card you’re removing her from. If her credit items are as old (or older) removing her won’t negatively impact her credit more than a couple of points. If her credit history is much younger than that card (even 5 years newer) it could cause a fairly hefty drop in her score. The other thing that could hurt is if you’re removing other credit lines (paying off other loans, closing other credit accounts, etc.) If you’re unsure it’s probably best to leave it as is since the card isn’t being used anyway.

Xtina8791’s reply was:

While you are not responsible for a debt as an “authorized user”, the credit reporting agencies like to include the account on your report so that a “debt buyer” can use it to collect from the authorized user (who may have a good credit score) when they can’t collect from the actual account holder. Keep in mind, the CRAs sell this information to debt buyers and they include information about who’s more likely to pay the debt. I have a lawsuit against Equifax for this very issue. Experian and Transunion removed the account when I disputed it as “not mine”. Equifax refused to remove it. The account belongs to my wife and it’s now in collection. I removed my name as an authorized user and Equifax still refused to remove the account. I disputed it no less than 3 times. Now that it’s in dispute for one last time while the lawsuit is still pending, they have no choice but to remove the account or report the accurate status as in collections. and of course, if they report the current status as “in collections” to damage my credit score, they’re asking for trouble since they already knew the account was not mine and I’ve never been a co-obligor on the account. The CRAs know that consumers are ignorant to the law. so do the debt buyers. I’d advise every consumer to get familiar with the provisions of the Fair Credit Reporting Act and file a lawsuit if the CRAs refuse to remove these accounts when disputed. In most cases, you don’t need a lawyer to do this and many lawyers won’t take a case like that because of the small amounts involved for statutory violations ($100-$1000). If they intentionally refuse to remove after a reinvestigation, the potential for punitive damages is triggered and there’s no set limit as to the amount of punitive damages that can be awarded.

By the away, before filing a lawsuit against Equifax, I began using screen capture software to capture proof when I submitted disputes to Equifax via their online dispute system. Why? They can and did change my disputes after they were submitted and in some cases the diputes fell into black holes and weren’t responded to. also cases where they provided false dispute results without a corrected credit file forcing me to purchase new credit files only to realize what they said they deleted or corrected wasn’t true.

Also beware of the bogus fraud alert on your equifax credit file. If you only see the words “Extended Fraud Alert” on your credit file with no statement and contact info, you are on their VIP (blacklist) and they will make everything a living nightmare for you anytime you file a dispute or attempt to get free credit files. Also, they may tell you that you’re required to pay for a security freeze when you’re in a state that doesn’t require a fee. this is done by intentionally prevented you from placing a freeze via the web site or the automated phone system. the VIP status flag is used to block the services. The ViP status flag will also block any attempts by you to get credit monitoring unless you purchase that service directly from Equifax (akin to Extortion. i.e. you can either pay us to monitor your files or we will block your attempts to monitor your equifax credit file.). I know they do this because after they added the VIP flag to my file, I was unable to monitor the equifax credit file via IdentityGuard, Transunion or Bank of America PrivacySource. I ended up paying for the monitoring and cancelling because Equifax refused to remove the VIP (blacklist) status block.

Lastly, items on your credit file which you are only an authorized user do in fact affect your credit scores. Some people use it to increase their scores, but they’re scores will be affected negatively if (1) the credit limit is decreased and the highest balance is lower than the limit or (2) the account goes into collection after default. Don’t forget, the collection company can attempt to collect from you as an authorized user if they think you are not aware that by law, they can’t collect. but they’ll still damage your credit by verifying the account when you dispute it which will continue to lower your score until or unless you get the account removed.

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SOURCE: http://www.creditkarma.com/question/how-does-being-an-authorized-user-affect-credit-score

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