Dear Dr. Don,
When I turned 16, my parents gave me a credit card attached to their account to pay for gas and clothes. Now, 10 years later, I still have the card. I don't use it for anything, but my parents do. So it shows up on my credit report, usually with a monthly balance of around $1,000, which they pay off, and a credit limit of $19,800.
I only have two other credit cards (one is four years old, the other I've had for two years) with a combined $6,000 credit limit. I usually charge about $800 a month but pay it off monthly.
My question is: Is my parents' card helping or hurting my credit score? I'd like to get rid of it since it is attached to my parents and I'm independent, but I read that having a credit card with a long clean history is good. However, they have such a high credit limit, I don't know if it's an asset or not. Thank you.
-- Laura Long
Dear Laura,
If you're just an authorized user on the account you don't have any obligation to repay the debts on that card. You would if you were a joint account holder on the account. Credit card companies have to report the payment history when an authorized user is a spouse. It's at the firm's discretion when the authorized user isn't a spouse.
The long, clean history does help your credit score. Length of credit history is approximately 15 percent of your credit score, with payment history another 35 percent.
The following graphic shows the different components of a credit score and their weights:
Elements of your credit score
The key concern in keeping the card is how it impacts your ability to get approved for credit down the road. Since, as an authorized user, you're not responsible for the payments on the credit card, it should have no impact on your capacity for new credit. There's no immediate need to remove yourself as an authorized user from the account.