If I Remove an Authorized User, Does It Hurt Their Credit?

Authorized User Status and Credit Reporting

An authorized user is an individual granted permission to use a primary cardholder’s credit card account. This arrangement helps the authorized user establish or improve their credit history, as the account’s activity may be reported to credit bureaus under their name. Parents frequently add their children to accounts, or spouses may add one another, to facilitate credit building or simplify household spending.

When designated as an authorized user, the primary cardholder’s account information is included in the authorized user’s credit report. This includes the payment history, the credit limit, and the current balance. The consistent reporting of positive account behavior, such as on-time payments and responsible credit utilization, contributes to the authorized user’s credit profile.

The inclusion of this account on the authorized user’s credit report can help establish a longer credit history. It also contributes to a diverse credit mix and influences their overall credit utilization ratio. A high credit limit on the primary account, even if not fully utilized, can lower the authorized user’s overall utilization.

Effect of Removal on Authorized User Credit

Removing an authorized user from a credit card account can impact their credit score, as the associated account history no longer appears on their credit report. When the removal occurs, the credit bureaus are notified to delete the account from the authorized user’s file. This deletion means that the positive payment history, credit limit, and balance information are no longer factored into their credit score calculations.

The extent of this impact depends on the authorized user’s overall credit profile. If the removed account was one of the oldest accounts on their report, its removal can reduce the average age of their credit accounts. A shorter average age of accounts results in a lower credit score.

The removal can affect the authorized user’s credit utilization ratio. If the authorized account had a high credit limit and a low balance, it likely contributed to a favorable overall utilization ratio. Once removed, that credit limit is no longer considered, potentially increasing the authorized user’s overall utilization. This change in utilization can lead to a decrease in their credit score.

Variables Influencing Credit Score Changes

An authorized user’s credit score change after removal is not uniform and depends on several factors. One variable is the credit reporting practices of the card issuer and the credit bureaus. Some creditors may not report authorized user accounts, or they may report them differently across the three major credit bureaus.

Another factor is the authorized user’s existing credit portfolio. If the individual has a robust credit history with numerous active credit accounts, the removal of one authorized user account may have a minimal impact. Conversely, if the authorized account was one of their only active accounts or represented a substantial portion of their available credit, the impact could be more pronounced.

The age of the authorized account plays a role in the credit score change. If the removed account was old and had contributed to the authorized user’s average age of accounts, its deletion could lead to a drop in their score. In contrast, removing a relatively new authorized account might have less effect on the average age.

Finally, the credit utilization on the removed account before its deletion can influence the outcome. If the account had a high credit limit and a low balance, it positively contributed to the authorized user’s overall credit utilization. Its removal would eliminate that favorable credit limit, potentially causing their overall utilization ratio to increase and negatively impacting their credit score.

Primary Cardholder Credit Considerations

Removing an authorized user from a credit card account has no negative impact on the primary cardholder’s credit score. The account itself remains open and active under the primary cardholder’s name, and their payment history and credit utilization continue to be reported as usual. The credit card issuer simply revokes the authorized user’s access and removes their association with the account.

The primary cardholder maintains responsibility for the account’s balance and all transactions made. Their credit score will continue to be influenced by their own payment behavior and how they manage the account’s credit limit and balance. The act of removing an authorized user is an administrative change that does not alter the fundamental characteristics of the primary account.