Q: I recently moved out of my parents' house. I am 19, and while living there I had a credit card that was on my parents' account. I actually had two, because they switched the credit card they were using. I no longer use either credit card, but because my name was previously on them, and the accounts are still open, they are lowering my credit score. My parents are not in credit card debt or anything, and my husband and I pay off our own two cards every month. But because I was on my parents' accounts, it looks as though I have had four different cards in the last two or three years. Is there anything I can do to raise my score?
A: in your case, the two best things you can do to raise your credit score are to continue paying your credit card bills and all your financial obligations promptly - and to simply give your credit time to build.
You are only 19 years old and you have to realize that while age itself isn't a factor in the credit scoring system, the length of your credit history is; it accounts for 10 percent of your credit score. So for all practical purposes, this puts a young adult like yourself at a relative disadvantage. After all someone who is 30, 40, or 50 years old has likely had the benefit of having a credit card and other credit accounts for decades.
Of the four credit cards you're associated with, you said you pay two of them on time and in full every month. That's good. And it will strengthen your FICO score over time. About 35 percent of your FICO score is determined by your payment history. So every time you make an on-time payment, that helps boost your score and it also adds another solid month of positive credit history to your credit files.
Realize too that paying off your balances is doing wonders for your credit rating. That's because the amount of credit card debt you owe accounts for 30 percent of your credit score. So keeping very low credit card balances (or even zero balances) is desirable not just financially, to reduce interest charges, but also from a credit standpoint.
Finally, if your parents are also promptly paying those other two credit cards on which you are an authorized user, I wouldn't worry about those at all. Frankly, they're probably helping your credit score, not hurting it.