Does Removing an Authorized User Hurt My Credit?

Understanding Authorized Users on Credit Accounts

An authorized user is an individual granted permission to use another person’s credit account, typically a credit card account, without being legally responsible for the debt incurred. This arrangement allows the authorized user to make purchases using the primary account holder’s credit line. While they can use the card, they are not obligated to make payments. This status can be a way for individuals, particularly those with limited credit history, to begin establishing a credit profile.

Understanding Authorized User Status and Credit Reporting

When an individual becomes an authorized user on a credit card account, the account activity is frequently reported to major credit bureaus under their name. This reporting includes details such as the account’s credit limit, current balance, and payment history.

For the authorized user, a well-managed primary account, characterized by timely payments and low credit utilization, can reflect positively on their credit profile. Conversely, if the primary account experiences late payments or high utilization, these negative factors may also appear on the authorized user’s credit report. This reporting mechanism means the authorized user’s credit history can be influenced by the primary account holder’s financial behavior. Most credit card issuers report authorized user accounts to all three major credit bureaus: Equifax, Experian, and TransUnion.

Impact on the Authorized User’s Credit

Removing an authorized user from a credit account can significantly impact their credit profile, as the history associated with that account is typically removed from their credit report. This removal can alter key components of a credit score. For instance, if the authorized user account was one of their oldest credit lines, its disappearance might reduce the average age of all accounts on their report, potentially lowering their score.

Furthermore, the removal of an authorized user account can affect credit utilization. If the authorized user relied on the primary account’s credit limit to maintain a low overall utilization ratio, its removal could cause their personal utilization to increase if they have fewer other credit lines available. This shift can occur even if their spending habits remain unchanged. The credit mix, which reflects the variety of credit products an individual uses, might also be altered, especially if the authorized user account represented a significant portion of their credit portfolio.

However, the actual impact varies depending on the authorized user’s overall credit profile and the nature of the primary account. If the primary account had a history of negative items, such as numerous late payments or high balances, its removal could potentially benefit the authorized user’s credit score by eliminating those detrimental entries. Conversely, if the authorized user has a thin credit file, the removal of a well-managed authorized user account could result in a more pronounced negative effect on their score. The extent of the change hinges on the individual’s existing credit history.

Impact on the Primary Account Holder’s Credit

Removing an authorized user generally has no direct impact on the primary account holder’s credit score or report. The credit account remains solely under the primary account holder’s name and social security number. All aspects of the account, including its payment history, credit limit, and utilization, continue to be tied exclusively to the primary account holder. The primary account holder remains fully responsible for all charges made on the account, regardless of who made them.

The primary account holder’s financial responsibility and the account’s standing with credit bureaus are unaffected by the removal of an authorized user. Any changes to the primary account holder’s credit score would stem from their own management of the account, not from the authorized user’s removal. An indirect benefit for the primary account holder might be gaining more direct control over spending on the account, which could help manage overall credit utilization more effectively.

Removing an Authorized User

The process for removing an authorized user from a credit card account is generally straightforward for the primary account holder. To initiate the removal, the primary account holder typically needs to contact the credit card issuer directly, which can be done by calling the customer service number on the back of the credit card or billing statements. Many credit card companies also offer the option to remove an authorized user through their online banking portal or mobile app.

When contacting the issuer, the primary account holder will usually need to provide their account number and the full name of the authorized user to be removed. Some issuers may also request additional verification information to confirm the identity of the primary account holder. Once the request is submitted, the removal process typically takes a few business days to a week for the credit card company to process. Confirm with the issuer if any physical cards issued to the authorized user need to be destroyed or returned.

Post-Removal Considerations

Following the removal of an authorized user, it is advisable for the authorized user to monitor their credit reports from all three major credit bureaus—Equifax, Experian, and TransUnion. They should check within a few weeks to confirm that the authorized user account has been removed. If the account still appears after 45 days, the authorized user may need to contact the card issuer or dispute the inaccuracy with the credit bureaus. This verification helps ensure accuracy in their credit file.

If the authorized user’s credit score was negatively impacted by the removal, they may need to focus on establishing or strengthening their own independent credit history. This can involve applying for their own credit products, such as a secured credit card or a small personal loan, and consistently making timely payments. For the primary account holder, account management continues as usual, with full responsibility for all transactions and payments remaining with them.