Believe it or not, the following scenario is all too common: “I just saw my credit report for the first time & there was a credit card account that I had no knowledge of. When I called the bank that held the account, they told me it was somehow attached to my mom. The account was opened in 1996, I would have been ten years old at the time, and my name is attached to the account! Not only was this account opened without my knowledge, it has hurt my credit score as there are multiple late payments. Since I had no knowledge of this account, am I responsible for how it has affected my credit score? And how can I get it off my credit report?”
Authorized User Status Impacts Credit Score
This situation could have easily been the result of a parent trying to establish a credit history for their child by including them as an authorized user on their credit card account which ultimately back-fired. As a reminder, many credit bureaus use a FICO score which incorporates credit history for authorized users such as a child. When a parent lists their child as an authorized user on the credit card account, the child will be linked to the parent’s credit profile. But, this only helps a child’s credit profile if the parent has superb credit. If their credit is poor, then the child’s credit can be negatively impacted. If a parent misses a minimum payment, the child does too.
Does the Child Have Any Recourse
Although an authorized user is not legally obligated to pay the credit card debt, the credit bureaus continue to report the payment history of the principle account holder on the credit reports of authorized users. Unfortunately, there is no law preventing the credit bureaus from doing this or requiring that the authorized user’s credit history be cleared. But, there have been lawsuits filed by those damaged by this practice and an authorized user can certainly take proactive steps to improve their credit as detailed below.
Contact the Credit Card Companies
Immediately, request that the primary account holder contact the credit card company to remove you as an authorized user. If there are any other accounts in which you are listed as an authorized user, have your name removed as well.
Speak with the Credit Bureaus
The next step is to call up the three major credit bureaus (Experian, Equifax, & Transunion) to explain to them the issue. They will likely request that you send them a formal letter detailing the specifics of the matter & how your credit report was unfairly damaged as a result of the actions of the primary cardholder. It would also be worth your time & money to have a lawyer draft the letter as your credit report is very important to your ability to finance large capital purchases (i.e. a home) in the future.
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