Steps to remove yourself from mom's card
Dear Opening Credits,
I'm 26 years old and am wondering what step I should take next in my financial future. I've had a credit card for more than a year with a $1,500 limit. I always pay two or three times the minimum payment each month and make sure I never utilize more than 30 percent. My FICO score has gone up each month for the past year and is currently 703.
When I was in college, my mother added me as an authorized user to one of her credit lines and I'm still on that account. Ninety-five percent of that card is utilized, which has a limit of $3,600. I haven't used the account for years, and I suspect my mother can only afford to make the minimum payments each month. Taking my otherwise short credit history into account, should I immediately get off my mother's account or should I stay on it for a while and try to help her pay it off? In either scenario, when would be a good time for me to open up another line of credit? -- Kelly
You are doing so well on your own I see no reason for you to remain tethered to your mother's credit card -- and certainly not her credit history.
Because your credit score (a FICO, I presume) is over 700, you should be eligible for another card, and one with more favorable terms. While your score is not quite in the excellent range of 745 and above, it's considered "good," which is the second highest category. As long as you have a steady income, the products that are available to you should have low interest rates and fees, plus appealing rewards programs.
Take a look at the cards for people with good credit. I think you'll be pleasantly surprised. Identify the account that best suits your needs. Apply before excusing yourself from your mom's credit card because your score is where you want it to be and I wouldn't want you to jeopardize it. Although her debt is extremely high compared to her credit limit, she might have established an excellent payment history -- and that's working in your favor.
Once you get the new credit card, take action to be entirely independent. Either ask your mom to call the creditor to remove you as an authorized user or you can do so. It usually takes just a phone call to the credit card company, but some require a written request.
When you're no longer associated with this account, its history will be permanently purged from your consumer credit report. Only data that appears on a credit report can be factored into your credit scores. That will leave the credit you've managed perfectly for over a year and the new account. Chances are your scores might dip at first, but will increase quickly after that, because you'll be showing what is desirable to other lenders: on-time payments, a low debt-to-credit limit ratio (improved even further with the additional card's credit limit), and a variety of credit products in use. Keep doing what you're doing and your FICO scores have no place to go but up.
Regarding your mother's debt, if you want to help her repay and have the means to do so, wonderful. As her balance decreases her score will rise, so you'll be returning the favor she did for you. More, you'll be releasing her of a financial burden. She would probably satisfy the creditor if she could, so reach out. Tell her that it's important to you to feel helpful. If she resists and you feel strongly about it, stay on the card and make payments on her behalf.
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Published: August 26, 2015
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