How Deleting an Authorized User Affects Their Credit Score
One easy way to help someone earn credit is to add it to your credit card as an authorized user . This does not directly affect your own credit, but it can be of great help to those looking to improve theirs. However, once you remove them, it can affect their creditworthiness.
There are several reasons why you want to exclude someone from the list of authorized users of your card. Maybe the user is your child and they are ready to build their own account. Maybe you even decided that adding this person is not a good idea. Maybe you just want to close the map. Whatever the reason, Credit.com expert Jeri Detweiler explains that it can affect their valuation in two ways.
First, it can affect the length of their credit history. Your credit age is 15 percent of your FICO score . So if the account you plan to delete them from is one of their oldest, they might see their rating drop.
Probably the more important factor is the use of credit , which is 30 percent of the score. It is the ratio of available credit to the amount they actually use. If you dump them from your card, their line of credit drops too. And this could increase their ratio. Credit.com puts it this way:
Removing your account from the pool will lower their available credit and therefore raise the ratio of how much credit they are using versus what is available. “Credit scoring models compare the available credit limits on credit cards to the outstanding balance,” Detweiler said. … “This is usually calculated individually and collectively. Therefore, if their own balances are high, removing the credit limit on your account may affect the debt utilization rate. “
Basically, the reasons why adding an authorized user might increase someone’s creditworthiness are the same as the reasons why removing them might harm them. However, if they increase their reputation slightly, the impact may be minimal. Check out Credit.com’s full publication for more details.
Can I delete an authorized user without damaging their credit? | Credit.com