How Removing Authorized Users Affect Credit

Q. I am wondering if dropping an additional user from my credit card account will impact the credit score of that additional user. I have my daughters as authorized users of my account from the days when they were in college — over five years ago. Now they are married, living independently and have careers and credit scores of their own. What would removing them mean?

A. We bet you helped your daughters off to a good credit start by having them on your account.

What happens now, though, will depend more on their own credit histories. Removing someone from an account and how much it affects their credit scores will vary.

“When you remove an authorized user from your account, typically that account will be removed from the authorized user’s credit reports,” said Gerri Detweiler, who heads up consumer education for Credit.com. “Whether or not that will directly affect their credit scores depends on how these accounts are currently impacting them. And that’s a little bit hard to measure because it depends on everything else in their credit reports.”

Detweiler said the two factors that may be impacted in particular are credit age and utilization.

Not counting the account you added them to, they haven’t been using credit as long. That means removing them from your account will shorten their own credit histories. Having a longer credit history is a positive for their credit scores, but that’s not as important as their current payment histories and other items.

Utilization could be a bigger factor. That’s a ratio of how much credit they’re using compared to their available balances. Removing your account from the mix will lower their available credit, and therefore raise the ratio of how much credit they’re using compared to what’s available.

“Credit scoring models compare the available credit limits on credit cards against the outstanding balance,” Detweiler said. “This is typically calculated individually and in the aggregate. So if their own balances are on the high side, then removing the credit limit on your account could affect this ‘debt usage’ ratio.”

But still, Detweiler said, it’s probably time to take them off your accounts.

“You are still responsible for any charges that are made on the account by them as long as they remain authorized users, and sometimes it’s best to play it safe,” she said.

If you ever decide to cancel a card, learn about how it could impact your credit score before you make a move.