Should I remain an authorized user on my mom's credit card?
I'm 25 years old and I have no credit history other than this account for the last seven years. She makes her payments on time but keeps the card maxed out. I'm ready to start my own credit life but I'm not sure if having this account attached to me is helping or hurting. My credit score is around 580 and tools like Credit Karma show my credit utilization at over 100%. Would I be better off removing myself from the account and starting fresh? Will removing it negatively effect me? How does having an authorized account for seven years look to potential lenders?
You have the right idea to focus on your own credit worthiness. Continuing on your mother's card is hurting you as indicated by a poor credit score of 580. Apply for a new credit card, or two, in your own name. After you have secured them, have your mother remove you from her card. At that point your credit utilization will drop to 0% and your credit score will begin to rehabilitate. Use your cards responsibly, for convenience, and pay off the balance in full and on time each month. You should see an improvement in your score within just a few months. After you have your new cards for one year, request an increase in the credit limits so as to make your utilization even lower.
Remember, a credit card is simply a convenience and not a free ticket to buy things for which you cannot pay. And there are some great cards available with up to 5% cash rebates on purchases. Also, I recommend cards with no annual fees unless there is a very compelling reason to accept the fee in exchagne for mega bonus points and/or rebates. I recommend having at least two, preferably three cards to your name because they are so suseptable to compromise, at which time the bank will immediately shut the card down and you have no use of it until you receive a new card in about 10 days.
I wish you the best.
Yes, you should get off of your mom's card. The fact that she keeps it maxed out is a warning that she may not be paying in the future. Of course, that damages your credit the most. A smaller part of the credit score formula is capacity utilzation and if this is your only card, that part of the score will be lower. Hope that helps!
My first choice would be to use a debit card and do not have a credit card at all. Most credit cards are ridiculously high in interest rates right now.
I do not believe that you can remove yourself easily from a liability account of most any kind, including credit cards. Banks do not like to let people off the hook like that, so taking yourself off the account is probably not an option. However, it will not hurt to try.
Can your Mom apply for another credit card on her own? Or, use another credit card and close that one out? Let Mom get a new one or use a different one in just her name, then cancel the one with you on it. Shop around at www.creditcards.com, or if you have a credit union account, those are generally a good place to look for a credit card since the rates are usually lower.
If you were not listed first on the credit card account, then it is likely not helping your credit score anyway. So, if you think you have been benefiting by being on a joint credit card, then you probably have not as far as your credit score is concerned. The person listed first on the account is what matters.
Bill paying on time is more important than having a credit card at your age. Credit cards are hard to get rid of once you get one. Use debit if at all possible. When it comes down to it, you really do not have to have a credit card. As long as you pay your bills on time, then you are good.