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Credit Report & Authorized User on Credit Card

My credit card account is in collections, and this appears on my child's credit report? Why? What can we do about it?

In 1999 my husband and I opened a credit card with Citibank. It was open until 2009. In that time I got a card with my daughter's name on it for convenience. It was our account and not hers. Our credit was good until their was an accident in our family. That account went to collections. It has since been paid. This bad report of Citibank is showing up on my daughter's credit report. Why? She was not the responsible one for that debt. When we opened that account in 1999 she was 12 years old. Can they report this on her account just because I got her a card on my account?

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Bill's Answer
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Highlights

  • An account's activities appear on authorized users' credit reports.
  • Strong accounts boost an authorized user's credit score.
  • Weak accounts drag an authorized user's score down.

My answer assumes your child was an authorized user of the credit card account in question, and was not a co-signatory.

A credit card issuer can, and in many cases must, report the activity on a credit card account on the credit reports of the primary cardholder and all authorized users. However, only the primary cardholder is legally liable for charges on the account.

When the account in question was paid on time and the balance was low, this account helped boost your child's credit score. Given the longevity as an authorized user, this account jump-started your child's ability to get credit.

Now that the account is in default, the reverse is happening — this account is dragging down your child's credit score. Is that fair? That depends on your perspective and the strength of the account.

What can you do about it? Remove your child and any other authorized user from this account immediately. After you do so, your child may need to dispute this derogatory entry.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

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/5.0
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