Let’s dive deep into the strategy our client stumbled upon to significantly improve his credit score in an unbelievably short time frame. I’ll share the exact steps, tools, and mindset shifts required to make this happen.
Client Success Story: Financial Transformation
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So this was easier than you think…
First and foremost, it’s crucial to understand that this individual was in need of guidance. Unbeknownst to him, the authorized user profiles he was a part of on several credit cards had faltered due to the primary cardholders not adhering to their initial agreements or projections. Typically, when one becomes an authorized user, there’s an implicit understanding that the card’s owner will maintain a low utilization rate — ideally between 1 to 3% each month when the card reports. Unfortunately, for this gentleman, the utilization on these cards surged, particularly during the holiday season, leading to a drastic drop in his credit score by over 100 points.
It’s not common knowledge for everyone to be versed in the nuances of credit management, which is why our mission is to continuously educate our clients and the wider public on the dynamics of credit. If being an authorized user had positively impacted his credit, it would certainly be advisable to add such accounts to one’s profile, as they have the potential to boost one’s score significantly, especially if the card in question is high-level, consistently paid on time, and maintains low utilization.
However, there’s a limit to the number of authorized user relationships one can have on a credit profile before underwriters start to perceive it as a sign of being a credit risk. Often, having a family member add you as an authorized user can be the most beneficial scenario. Unlike purchasing an authorized user position, which typically lasts only two months, a family member might not have a profit motive and could allow you to remain on their account for much longer periods, potentially months or even years.
That being said, there are advantages and disadvantages to both being added as an authorized user and adding someone to your credit card as one. It’s important to note that there are alternative methods to incorporate primary trade lines into your personal credit, methods that ensure your low utilization isn’t jeopardized.
We encourage you to stay engaged and continue reading our blogs, where we aim to educate our clients and potential clients on effective credit management strategies. Remember, you always have the Credit Genie to turn to for inquiries, available right at the tab labeled “The Ultimate Business Credit Genie.”
Thank you for your attention, and we wish you the best of luck on your credit journey. Godspeed.