Does Removing Someone As An Authorized User Hurt Their Credit?

If you’ve added a close friend or relative as an authorized user to one of your credit cards, you might be wondering whether taking them off as an authorized affects their credit. This post provides you with everything you need to know as to how removing someone as an authorized user impacts both their credit and your credit.

Does Taking Someone Off As An Authorized User Hurt Their Credit?

Taking someone off as an authorized user from your account could hurt their credit score, especially if they haven’t built their own credit history using their own accounts. The effect that taking off someone as an authorized user depends on the age of their accounts and their credit utilization. The older the person’s accounts and the lower the credit utilization, the less of an impact there will be to their credit.

Removing someone as an authorized user from your account removes the account from their credit report as if it were never there. The credit score is then determined by the accounts remaining on the person’s credit report.

If the person has built their credit by opening loans and credit cards and making timely payments, the effect on their credit score will be small, especially if they’ve had open accounts that have always been paid on time for a long period of time.

However, removing someone who has few accounts open may cause a big point drop. It all depends on what other accounts the person has on their credit report.

CSP Pro Tip: That said, if the primary cardholder has made late payments on the account and/or keeps a high balance on their credit card, removing an authorized user from the credit card account could actually help their credit score. This is so because removing them as an authorized user removes the credit card account from their credit report, eliminating the effect the account has on the authorized user’s credit score.

Why Does Removing Someone As An Authorized User Lower Their Credit Score?

Removing someone as an authorized user from your credit card can lower their credit score because removing someone as an authorized user will remove the credit card account from the authorized user’s credit report, forcing the credit scoring models to rely only on other accounts that the authorized user has on his or her credit report.

For example, removing some as an authorized user from your credit card reduces the amount of available credit that the authorized has, causing the person’s credit utilization to increase.

An increase in credit utilization can cause the authorized user’s credit score to drop because credit utilization makes up 30% of your credit score. Whenever credit utilization (use of total available credit) increases, a person’s credit score drops.

As a rule of thumb, you should keep your credit utilization below 10% and never exceed 30% credit utilization. Exceeding 30% credit utilization can cause a dramatic drop in your credit score.

So, for this reason, removing a person as an authorized user could hurt their credit score if the credit utilization significantly increases.

Now, if the authorized user has other credit cards with low balances, removing them might not affect his or her credit score. But, if the authorized user is carrying a balance on his or her other credit cards, removing them as an authorized user could cause an increase in credit utilization, lowering their credit scores.

A second reason that taking someone off as an authorized user can lower their credit score is because it may shorten their credit history. This is especially true if the authorized user has not opened his own accounts.

This is so because account age makes up 15% of a person’s credit score. Typically, adding someone as an authorized user boosts their overall account age. So, by removing them from your credit card, you are potentially shortening their average account age, lowering their credit score. So, for this reason, you should consider this factor before removing someone as an authorized user from your credit card, especially if they don’t have other accounts open.

A third reason that removing someone as an authorized user could lower their credit score is that it removes the account from their credit report, removing the positive payment history behind the account. Payment history accounts for 35% of a person’s credit score. So, removing a person as an authorized user could cause their credit score to drop because the payment history is removed along with their status as an authorized user.

Should You Remove a Person As An Authorized User?

It’s really up to you whether you want to remove someone as an authorized user from your account. We’ve provided you with some of the things that you should consider before removing a person as an authorized user.

That said, there are some valid reasons as to why you may want to remove someone as an authorized user.

The biggest reason that you may want to remove some as an authorized user is that you, as the primary cardholder, are liable for any charges that the authorized user makes on your credit card. So, you might want to remove them to limit your liability for their purchases.

For example, if you added your daughter, son, or close friend to your credit card, and they’ve built their own credit, it may make sense to remove them from your credit card.

Also, if you are no longer on good terms with the authorized user, it makes sense to remove them from your credit card because you are liable for repaying any purchases they make using your credit card account.

Why Do People Add Others As Authorized Users On Their Credit Card Accounts?

People often add a person who has not established his credit history to their account as an authorized user because doing so adds the credit card along with the entire account history to the authorized user’s credit report, boosting their credit score and instantly providing them with credit history.

That said, when you add someone as an authorized user, the authorized user is not responsible for making payments on the credit card. Only the primary account holder is responsible for making payments on the credit card.

If the primary account holder fails to make payments on the account, late payments will be added to both the primary account holder’s credit report and the authorized user’s credit report.

That said, removing an authorized user removes the account from their credit report along with any associated negative information on the account.

How To Remove Yourself As An Authorized User?

You can remove yourself as an authorized user by contacting the card issuer via telephone and asking them to remove you as an authorized user from the credit card account. Some card issuers offer authorized users online access to the account, so if you have online access, you may be able to remove yourself online. That said, if you do not have online access, you can always remove yourself as an authorized user by contacting the card issuers using the number on the back of your credit card.

After removing yourself as an authorized user, the account will be removed from your credit report within a short period of time.

That said, before removing yourself as an authorized user, you should consider the disadvantages of doing so.

If the account was poorly managed by the primary account holder, it makes sense to remove yourself. However, if the account has a good history, removing the account may hurt your credit score, depending on the other accounts you have on your credit report.

After removing yourself as an authorized user, you should review a copy of your credit report. The account should be removed from your credit report within 30 to 60 days of requesting removal. If the account has been removed from your credit report, this means that you are no longer an authorized user.

However, if more than 60 days have passed and the account still appears on your credit report, chances are that it has not been removed. If the account still appears on your credit report, contact the card issuer again and inquire about whether they’ve removed you from the credit card.

Frequently Asked Questions (FAQs)

Q: How long does it take for an authorized user to be removed from a credit report?

It could take up to 60 days from the date you removed yourself as an authorized user for the account to be removed from your credit report. It all depends on how quickly your card issuer reports the changes to the credit reporting bureaus.

Q: When should you remove an authorized user from your credit card?

You should remove an authorized user from your account if you no longer want to be liable for purchases the authorized user makes or if you’ve severed the relationship between yourself and the authorized user.

Q: How does adding an authorized user affect the primary cardholder’s credit?

Adding an authorized user has no effect on the primary account holder’s credit because nothing changes on the primary cardholder’s account. That said, if the authorized user charges too much on the credit card, this could increase your credit utilization, lowering your credit score. It is solely the primary account holder’s responsibility to make payments on the credit card.

Q: Can you improve your credit by removing an authorized user?

No, you cannot improve your own credit by removing an authorized user. However, if the authorized user is making charges that you don’t want to pay, removing them and paying off the balance on your credit card could improve your credit.