Expert: Yan Ross - 11/27/2009

Question
This is a very long, drawn out situation, so please bare with me if you can :)
In 1989, when I was 3 years old, my parents took out a credit card and placed my sister's name on the account. My sister grew up and moved on with her life.
Fast forward to 2004. My parents put me as an authorized user on this credit card when I went off to college, just for emergencies. A few weeks ago, I had my name taken off of the account since I had never used the card. A few days later, I try to apply for a mortgage for my first house, and it shows that that card has a MASSIVE negative balance on it and it is currently pulling MY credit score down almost 150 points, even though it's not mine. I had Equifax and Transunion send a dispute to the credit card company (Experian didn't count their card against my score) and I am desperately trying to get my parent's debt taken off of my credit report. Am I right in thinking that it should't be on my credit report? Does the dispute typically work in these types of situations?
Thank you sooo much in advance!
Kim

Answer
Kim,

You pose a question that appears to be a situation in which credit reporting agencies and credit card issuers are in the process of developing some new rules.

Over the past several years, people with good credit have "rented" their good records to people whose credit is weak.  It's been done by adding the weak credit person to as an authorized user on a credit card account.  Often, intermediaries (brokers) have set up this arrangement for a fee.  The object is to get the person with weak credit to establish a better record built on the good credit of the primary account holder.

As you can imagine, the credit reporting agencies and credit card issuers have begun to look at this practice with skepticism, since the payment on the account does not in fact rely on the creditworthiness of the weaker credit person.

Unfortunately, this can also work in the opposite direction, as it has apparently done in your case.

However, I believe you can turn the more recent trend to your advantage, by pursuing the path you have taken so far -- disputing the inclusion of your name on the credit card account.  I must add immediately that this may depend on your being able to state truthfully that you have not used the credit card for purchases or cash advances.

Secondly, you are entitled to send a written statement of up to 100 words to each of the credit reporting agencies, which then must be included in your credit report when it is sent to any legitimate requester (such as a prospective lender for your proposed mortgage).  I would suggest that you write such a statement and send it to Equifax and TransUnion for inclusion in your file.  The statement should cover the same points you wrote in your question to me.

I hope that helps.

Good luck!