Hello! Thanks in advance for any advice and help with this!
Credit is ~775 on Equifax, ~745 on TransU, and ~730 on Equifax (the latter two according to Credit Karma).
I always pay credit cards on time, but my credit diversification isn't great and average age of account is only 1.75 years.
We are looking at buying within 3-6 months possibly.
If I were to be added as an Authorized User (AU) on a family member's account that is in excellent standing and is, idk, ~10 years old, that should help, yeah?
I've heard that I should not be opening any new credit accounts within 4 months of going to the bank to check credit for the mortgage. Would being added as an AU on another account within 4 months be bad, or would it show up on my account as not new but old (and of course that's how it helps my credit score)? That seems right to me, but want to make sure before. The mistake would be too costly.
I was in mortgage so here are a few things to be aware of:
Mortgage companies will usually use the middle of your 3 scores as your credit rating. As it is over 720, you really don't have to worry(your score would not be an issue even lower but pricing on your interest rate can be impacted depending on the risk level). I wouldn't bother getting added on.
The creditor will look at the age of the accounts as a risk but will note if you have low usage, paid on time ECT so will really not be impactful for you, it is just something the underwriter like for and wwilladdress in their notes.
Regarding usage; for every 25% of the credit limit used on each card your score takes a bit, and the hits get bigger so keeping under 25% usage of paying in full is helpful for your score.
Regarding if the card is paid in full or just paid on time: this really doesn't matter as since it is an with an with user account, the underwriter has the discretion to exclude it from your file(so not count the payment towards your dti ratio). If you can qualify with the payment, the Underwriter will usually leave it in as is the most conservative option.
It will show up on your record the same way it does on your parents, so shows total time opened, not just since you were added.
The issue regarding not having new credit inquiries in the last 90 -120 days (it depends on the loan program how far the lender looks back)- it takes time for items to show on a credit report, so if you have an inquiry but no corresponding account, you will be asked for an explanation on what that inquiry was for and if any new debt was obtained. If there was new debt, you will need to document it and it will be added to your ratios. Thermal with getting added to your parents card is if you are added as a joint user, not just as an with user, then that payment would count against you, unless your parents weren't using to provide evidence that they had been the ones to make the payments, not you, for the past 12 months.....
Though it doesn't seem to be an issue for you as all 3 bureaus generate a score, if all you had was authorized user accounts, the lender may ask for nontraditional credit references- things like auto insurance, utility bills and rent to show you have the ability to make payments. The issue here is that the score wouldn't reflect your actual credit rating, and at this point you will have additional restrictions put on what type of mortgage, minimum down payment, loan total value and dti/housing ratios.
Also be aware, even if you pay a card in full monthly, if you use it on a regular basis you will still usually get hit for the minimum required payment as you are not required to pay it in full. So in other words, having multiple cards used every month, even if you pay them in full can torch your ratios.
Tl/Dr: For you, given your scores, likely would have no benefits and would potentially make more work for you and your lender.