Will My Credit Score Drop if Removed as an Authorized User?
Understand the effects of authorized user removal on your credit score and report, with guidance for managing your credit.
Becoming an authorized user on a credit card account can offer a pathway to establishing or improving one’s credit profile. This arrangement allows an individual to use a credit card linked to another person’s account without financial responsibility for the debt. A common concern arises when this status changes, leading many to question whether their credit score will decline upon removal from such an account. This article explores how removal from an authorized user account can affect your credit score.
Understanding Authorized User Status
An authorized user is an individual granted permission to use a primary credit card holder’s account. This typically involves receiving a card with their name on it, enabling them to make purchases. However, the primary account holder retains sole legal responsibility for all charges and payments made on the account.
When a credit card issuer reports authorized user activity to the three major credit bureaus—Experian, Equifax, and TransUnion—the account can appear on the authorized user’s credit report. This arrangement benefits individuals with limited or no credit history, as it allows them to gain the advantages of the primary cardholder’s positive payment behavior.
For instance, consistent on-time payments by the primary cardholder can positively contribute to the authorized user’s payment history, a factor accounting for approximately 35% of a FICO Score. Similarly, if the primary account maintains low credit utilization, typically below 30% of the available credit limit, this can also reflect favorably on the authorized user’s credit report. This helps build a stronger credit profile.
Impact of Removal on Your Credit Score
Being removed as an authorized user can lead to a change in your credit score, though the extent of this impact varies based on several factors. The score can decrease if the removed account was a significant positive contributor, as its positive history no longer influences your score.
One factor is the length of credit history; if the authorized user account was one of your oldest or only long-standing credit lines, its removal shortens your average account age. Length of credit history comprises about 15% of a FICO Score. Another consideration is credit utilization, which accounts for roughly 30% of your score. If the authorized user account had a high credit limit and a low balance, its removal could increase your overall utilization ratio, potentially lowering your score.
The payment history associated with the removed account also plays a role. If the account consistently had a perfect payment record, its disappearance means you lose the benefit of that positive history. However, if the primary account had late payments or high balances, being removed could prevent further negative impact or even improve your score. If you have a robust credit profile with other active accounts, the impact of removal might be minimal, as your score relies less on a single account.
What Happens to Your Credit Report
When you are removed as an authorized user, the account disappears from your credit reports at all three major credit bureaus: Experian, Equifax, and TransUnion. This means the associated payment history, credit limit, and balance from that specific account no longer contribute to your credit profile. The account is removed as if it was never there for scoring purposes.
This removal signifies that any positive or negative data from that account, such as on-time payments or high balances, will no longer be visible or factored into your credit score calculations. A complete deletion of the authorized user account occurs on your credit report. It usually takes approximately one to two billing cycles, or about 30 to 45 days, for the change to reflect across all credit bureaus.
While the primary cardholder initiates the removal process with the credit card issuer, which can be done over the phone or online, the credit bureaus then process these updates. If the account remains on your report after this timeframe, you may need to follow up with both the issuer and the credit bureaus to ensure accurate reporting. This ensures your credit file accurately reflects your credit relationships.
Managing Your Credit After Removal
After being removed as an authorized user, proactive steps are important to maintain or build a healthy credit score. Regularly checking your credit reports from Experian, Equifax, and TransUnion ensures accuracy and monitors for unexpected changes. These reports are available annually for free from AnnualCreditReport.com.
Monitoring your credit score using free tools from financial institutions can help track its fluctuations and the impact of removal. To build your independent credit history, consider applying for a secured credit card. This type of card requires a cash deposit, which serves as your credit limit, making it accessible even with limited credit history.
Another option for building credit is a credit-builder loan, where you make payments into a savings account that is then released to you at the end of the loan term. Regardless of the credit product, maintaining low credit utilization on all active accounts is important, ideally keeping balances below 30% of your available credit. Consistently making all payments on time is the most impactful action, as payment history is the largest component of your credit score.