There are a number of reasons why you should check your credit report regularly. When you apply for credit, lenders check your credit history, and when you apply for a job, employers may request access to your credit report. This is a useful tool for identifying fraud early on.
However, what do the digits, letters, or symbols on your credit report mean? We’ll walk you through the most prevalent characters, such as U, to help you understand these status codes.
What Does “AU” Stand For on a Credit Report?
You’re not alone if you’ve ever wondered what the mysterious “AU” on your credit report meant. “AU” stands for “Authorized User.” A person who is permitted to use a credit card or other line of credit that is registered in another person’s name is known as an authorized user. For instance, even though you are able to make purchases with your spouse’s credit card as an authorized user, your spouse is ultimately liable for the debt.
How Does Being an AU Affect Your Credit Score?
In the past, being an authorized user on a credit card could have a positive impact on your credit score. This is because the credit card company would report the account to the credit bureaus, and the positive payment history and credit utilization of the primary cardholder would be reflected on your credit report. However, in recent years, the credit bureaus have changed their policies, and the impact of being an authorized user on your credit score is now more limited.
New FICO Scoring Changes: What You Need to Know
As of 2008, the credit bureaus began to phase out the positive impact of being an authorized user on credit scores This means that being an authorized user on a credit card will no longer automatically boost your credit score However, there are still some potential benefits to being an authorized user.
Benefits of Being an AU:
- Build credit history: If you are new to credit, being an authorized user on a credit card with a good payment history can help you build your credit history.
- Improve credit utilization: If you are using a high percentage of your available credit, being an authorized user on a credit card with a low balance can help improve your credit utilization ratio.
- Access to rewards: If the credit card has a rewards program, you may be able to earn rewards points or miles even if you are not the primary cardholder.
Things to Consider Before Becoming an AU:
- Primary cardholder’s creditworthiness: The primary cardholder’s creditworthiness will have a significant impact on your credit score. If the primary cardholder has bad credit, it could hurt your credit score.
- Your spending habits: If you are not responsible with your spending, being an authorized user on a credit card could lead to debt problems.
- Joint liability: If you are an authorized user on a credit card, you are jointly liable for the debt. This means that you could be held responsible for the entire balance even if you did not make the charges.
Frequently Asked Questions (FAQs):
- Can being an authorized user hurt my credit score?
Yes, if the primary cardholder has bad credit or if you are not responsible with your spending, being an authorized user could hurt your credit score.
- How long does it take for authorized user accounts to show up on my credit report?
The appearance of authorized user accounts on your credit report may take up to 60 days.
- Can I remove myself as an authorized user?
Yes, you can contact the credit card issuer to remove your authorization.
Additional Resources:
- myFICO Forums: Does being an AU mean what it used to?
- Ramsey Solutions: How to Read Your Credit Report
Being an authorized user on a credit card can be a good way to build credit history or improve your credit utilization ratio. However, it is important to be aware of the potential risks before becoming an authorized user. If you are considering becoming an authorized user, be sure to talk to the primary cardholder about their creditworthiness and spending habits. You should also make sure that you are comfortable with the joint liability that comes with being an authorized user.
Your credit report at a glance
There are three credit references agencies in the UK â Experian, Equifax and CallCredit. Each credit reference agency can hold different information about you â thatâs why you should check all three regularly.
The way credit reference agencies display this information can differ too. Most credit reports feature status codes that can be numbers, letters or symbols. Credit reference agencies can use these codes to indicate how you made credit payments.
Understanding the meaning of these codes can assist you in comprehending the specifics of your credit history and may even enable you to identify an error. Â.
So what do these letters actually say about you and your credit history? Letâs take a look. Â Â Â Â.
AA
Account in early arrears (1-2 months)
BB
Sustained arrears (3 + months)
DA
Debt transferred to another collection company
DF
DM
Debt management programme in force
DT
OK
Okay â repayment requirements fulfilled
PS
Partially satisfied (lower amount accepted by lender)
QY
Query (account under review)
SF
Satisfied (closed following default)
ST
UC/U
Unclassified or recently opened account
VT
These are just a few of the status codes you could find on your credit report. A credit agency will record the letter U, which stands for unclassified, to indicate that there hasn’t been any activity on an open credit account. Â.
Credit reference agencies usually update open credit accounts monthly with the latest balance and status codes. When there isn’t a payment due for a while, the status code U is typically displayed at the beginning of a credit agreement. However, you shouldn’t be alarmed if you see a row of Us on your credit report; it won’t lower your credit score.
Contact the credit reference agency if you have any questions or concerns about a code that appears on your credit report.