A reader is splitting with his partner and wonders how best to get out of authorized user credit card ties that bind them.
One way to give your partner a credit boost is to add them as an authorized user to your credit card – provided, of course, that you are responsible in your own use of the card.
There may come a time when your relationship ends, though, and you want to remove them as an authorized user. How will that impact your credit score? That’s the question reader Tim is pondering.
He writes, “I’m splitting with a partner. We have never been legally married nor had children together. We have no other financial obligations together other than four credit cards. These four cards are in both of our names. None of them have high balances and I can pay them all off at once. Once they are paid off, I want to remove my name from the cards my partner had as their own. And remove my partner’s name from the cards I had as my own. What is the easiest and cleanest cut way to do this?
“Will our scores be dinged because technically we are closing an account that we were only attached to as ‘riders’ to begin with and not original account holders. I know closing accounts damages your credit. Or it used to. But does the damage still occur when you’re just having a name removed from the account? Any insight or directions you can give me on this will be very much appreciated. Thank you!”
Removing your partner as an authorized user
Getting your name off your partner’s cards, and vice versa, should be a relatively easy task. Just contact your card issuers and tell them you want your partner removed as an authorized user. And your partner should have the same conversation with their issuers.
Another alternative is to contact your partner’s card issuers yourself and ask to be removed as an authorized user. That sounds like a simple task, but card issuers take different approaches to having an authorized user remove themselves from an account. Some might remove you on your own say-so, but others will also require your partner’s consent to have you removed as an authorized user.
If you’re on good terms with your partner and they are on board with the plan you outlined, getting their consent should not pose a problem. If your partner isn’t agreeable to this plan, it may be a bit more of a complex situation.
Either way, when you remove an authorized user, it’s a good practice to get a new card with a new number for your account, as a safeguard, since your partner has the existing card number. If you have any recurring billings associated with the card, don’t forget to update the merchants involved as well about your new card number.
Credit score impact
As for the credit score impact, the primary fallout will be on your credit utilization, which makes up about 30% of your FICO credit score. Considering the credit line you had access to while an authorized user will no longer be available to you, you will have lower total credit to dip into.
If you have a total credit line of $20,000 on your own cards and $15,000 on your authorized user accounts, your total credit line, which used to be $35,000 will now drop to $20,000. If you do carry a balance on your cards, say $5,000, it means your credit utilization will jump from 14% to 25%. Credit scoring formulas look more favorably on a lower credit utilization ratio, so there could be a negative impact as a result.
For those who use an authorized user account to build up their credit history, and don’t have much of a track record with cards beyond that, removing yourself from an authorized user account would take a toll on the length of your credit history. This factor accounts for about 15% of your credit score.
If you have your own cards that you use responsibly and have a credit history that goes back a while, being removed as an authorized user will not have much of an impact on the average age of your accounts, and consequently your credit score. If the account lingers on your credit report, it would count toward the age of your credit history, even though the account will not be updated.
Tim, removing yourself as an authorized user from a partner’s credit card account is a relatively simple process if your partner goes along with the plan. Two potential credit score fallouts could be from any impact on your credit utilization and the age of your credit history.
You plan to pay off the balances on all four cards immediately after resolving the authorized user situation. This means that even though you will have a lower credit line to access in total, your credit utilization will go down considering the zero balance. That will be a near-term positive for your credit utilization. If you do carry balances in future, though, your credit utilization factor will be higher, which would mean a less beneficial impact on your score.
Considering you have your own cards, it seems the age of your credit history is not entirely tied to being an authorized user. So the credit impact of that factor is not likely to be significant. Good luck to you in disentangling yourself from this authorized user situation!
Contact me at firstname.lastname@example.org with your credit card-related questions.