Authorized Users on Credit Cards
I currently am on quite a few of my dads credit cards as Authorised User. The accounts were never joint. Now he is going to file bankruptcy and i was wondering am i going to be held responsible for the debt on the cards? or can my name be removed from the cards asap. he is looking to file around april of next yr. I am in the state of Iowa. Thanks for any help/input you may be able to give me
Re: Authorized Users on Credit Cards
This is some info on authorized users on credit cards:
Are you an authorized user on someone else's credit card account? If you answered yes then your credit rating is in jeopardy. You are advised to get your name removed as an authorized user from all credit card accounts as soon as possible.
What most people don't realize is that being listed as an authorized user on someone else's credit card account results in that person's payment history being reported to the authorized user's credit report as well. This is a good thing if you have no credit, because you can actually build up your credit if the main accountholder has good credit and pays her bills on time.
But what happens if the principle accountholder habitually pays late? What happens if the account is charged-off or the accountholder files bankruptcy? That information is reported to the authorized user's credit report as well. It will damage the authorized user's credit rating just as severely as it will damage the main accountholder's credit rating.
Of course, you are thinking to yourself, "How can this be? An authorized user is not legally obligated to pay the debt, even if he was the sole user of the credit card! And how is it that I can be discriminated against because someone else files bankruptcy?" These are very good questions. Any attorney will tell you that an authorized user never signed a contract with the credit card company and cannot be legally held responsible for the debt. Nevertheless, credit bureaus continue reporting the payment history of the principle accountholder on the credit reports of authorized users. There isn't a federal or state law that prohibits them from doing this, but a few lawsuits have been filed by people who have been damaged by this practice.
You might want to see about getting your named removed as an auth. user & as soon as possible.
Re: Authorized Users on Credit Cards
Thankyou very much for the info. Tonight i went and checked my credit report and its so correct, my credit score is no longer great like it used to be. Its dropped my score down to mid 600 instead of 732 like before. How do i get my name removed from these cards. Do i just contact the companies listed on my credit report and get my name removed or is this something i have to hound my dad to get done.
Thanx again your input is greatly appreciated
Re: Authorized Users on Credit Cards
If you are just an authorized user, the cards should not appear on your credit report at all. You can ask the credit card companies to remove the entries, and can also object to the entries with the credit reporting agencies which list them.