I am a minor, under 18. My grandmother ordered me two credit cards from her account in case of an emergency. She has defaulted, and the cards are reported as bad debts on my credit report. My mom is helping me dispute them, but is there anything legally that would help take these off my report? The cards were not joint accounts. In fact, my grandmother never gave my Social Security number.
In case of emergency, just break out the plastic, right? Not necessarily. As you can now see, credit cards come with many of their own potential problems, even when intentions are noble. What may have at first started out as a generous gesture of your grandmother's has now become an inconvenience. But don't worry — I believe that you can escape this credit crisis unscathed, and without too much trouble.
Because you were under the age of 18 when the accounts were opened, you were not legally able to enter into those contracts. The accounts aren't yours, and you're not responsible for their payment. It's not even a case of fraud that you would have to dispute with the credit card issuers and the credit reporting agencies. You already know that your grandmother didn't apply for the accounts by using your personal identification information without your permission.
Instead, it appears that she opened the cards in her name as an individual owner. After that, she added you as an authorized user. This designation gave you lawful access to the accounts. With two cards bearing your name, you were able to charge for items or services.
As for your credit report, that credit card activity began showing up on yours as well as hers from the date the accounts were opened. All the information about them is there, including a detailed payment history and their balances. If the accounts were kept in positive standing, you'd benefit not just from the ability to borrow money when needed, but by building a great credit rating that you could use in the future to qualify for accounts in your own name.
Unfortunately, your grandmother (or another authorized user) charged too much and didn't pay the bills. What can you do now? If the debt is still with the original credit card company, call the number listed on the back of the cards right away to remove yourself from the accounts. You may have to write a letter as well. Once you do that, you'll no longer be connected as an authorized user, and the accounts will not be on your reports any longer.
If the debts have already been sold to collection agencies, you'll have to do a bit more work, but it still shouldn't be too much of a hassle, especially with your mother's assistance.
Start by visiting one of the credit reporting agencies' websites and use its online dispute process. There are three credit bureaus, but contacting one is enough, as it will notify the others. Here are the links to each bureau's dispute page:
Back up your dispute with a letter explaining that you were an authorized user on the accounts and that you're not legally bound to them. Add supporting documentation (a copy of your driver's license should do, as it has your date of birth) and explain that you want all evidence of the bad debt wiped from your current and future files. Take a trip to the post office and send it certified mail, return receipt requested.
In about 30 days, the credit reporting agency should complete its investigation, and if all goes according to plan, the accounts will be purged. The agency will send you a free copy of your report with the updated information and will notify the other credit agencies so they, too, can report the accurate data.
The next time someone offers to help by tying you to their credit, say thanks but no thanks. It's a gift that comes with too many strings attached.
Got a question for Erica? Send her an email.