Does Removing an Authorized User Hurt Their Credit?

An authorized user is an individual granted permission to use another person’s credit card account. The primary cardholder adds this person, who receives a card bearing their name. While authorized users can make purchases, the primary cardholder retains sole legal responsibility for all payments. This arrangement helps build credit history, often for family members. The impact of removing an authorized user on their credit profile is a common concern.

Understanding Authorized User Credit Benefits

Being an authorized user can provide significant advantages for building a credit profile. The authorized user’s credit report reflects the primary account holder’s positive payment history. Consistent, on-time payments by the primary cardholder positively contribute to the authorized user’s credit standing, influencing credit scores.

If the primary account maintains a high credit limit and a low outstanding balance, the authorized user benefits from a lower overall credit utilization ratio. This ratio, representing the amount of credit used compared to available credit, is a significant factor in credit scoring. The longevity of the primary account can also increase the average age of accounts on the authorized user’s credit report, positively impacting their credit profile.

How an Authorized User is Removed

Removing an authorized user from a credit card account is a straightforward process, primarily initiated by the primary account holder. The cardholder contacts the credit card issuer directly to request removal. This can be done by calling the customer service number on the back of the credit card.

Some credit card issuers also provide options for removal through online portals or mobile applications. While the primary cardholder is responsible for this action, an authorized user can request their own removal by contacting the issuer. Once removed, the authorized user’s ability to make purchases using that account ceases.

Immediate Credit Score Impact

When an authorized user is removed from a credit card account, the associated tradeline is removed from their credit report by the major credit bureaus. This means the authorized user no longer benefits from the primary account’s positive payment history, credit limit, or age. A credit score drop often occurs, especially if the authorized user had a limited credit history or if the removed account was a significant positive contributor.

For individuals with a short credit history, losing a well-managed authorized user account can substantially shorten their average age of accounts. This reduction in credit history length, which accounts for approximately 15% of a FICO score, can negatively impact their score.

The removal can also affect the authorized user’s overall credit utilization ratio. If the removed account contributed a large portion of their total available credit, its disappearance could cause their remaining credit utilization to increase. For instance, if an individual’s total available credit drops from $35,000 to $20,000 upon removal, their utilization percentage will rise if they carry a balance, potentially hurting their score. This factor accounts for about 30% of a FICO score.

If the primary account had a history of missed payments or high balances, its removal might actually benefit the authorized user’s score by eliminating that negative influence. For accounts in good standing, the immediate impact is a decrease due to the loss of positive credit factors.

Factors Influencing the Impact

The degree of credit score impact an authorized user experiences after removal depends on several individual factors. An authorized user’s overall credit profile plays a significant role. If they possess numerous other active, well-managed credit accounts, the loss of one tradeline might have a minimal effect. Conversely, if the removed account was one of their few or only sources of credit history, the impact could be more substantial.

Credit utilization is another variable influenced by the removal. If the authorized user’s overall credit utilization ratio increases due to the loss of the removed account’s credit limit, their score could decline. This is particularly relevant if the authorized user relied on the primary account’s high limit to keep their overall utilization low. Maintaining utilization below a certain threshold, often cited as 30%, is beneficial for credit scores.

The age of accounts also significantly affects the outcome. If the removed authorized user account was one of the oldest accounts on their credit report, its disappearance could decrease their average age of accounts. This reduction in credit history length can negatively affect credit scores, especially for younger credit profiles. For individuals with a long personal credit history, this effect may be less pronounced.

Credit scoring models, such as FICO and VantageScore, may weigh these factors differently, leading to variations in the specific impact. Both models consider payment history, amounts owed, and length of credit history, but the emphasis on authorized user accounts can differ. FICO Score 8, for example, may lessen the impact of authorized user status compared to other credit accounts, while VantageScore might treat them similarly to primary accounts in some aspects.

Checking Credit After Removal

After being removed as an authorized user, monitor credit reports and scores to understand the actual impact. Individuals are entitled to a free copy of their credit report annually from each of the three major credit bureaus: Experian, Equifax, and TransUnion. These reports can be accessed through AnnualCreditReport.com.

Regularly reviewing these reports helps ensure accuracy and allows for tracking changes in listed accounts or credit factors. Many credit card companies and financial institutions offer free credit score monitoring services. These tools provide ongoing insights into credit score fluctuations and can help identify any unexpected changes following the removal.