Can Becoming an Authorized User Help Your Credit?

Often, yes, if you pick the right card. When someone adds you as an authorized user, the card’s history usually shows up on your credit report too. If that account is old, paid on time, and carries a low balance, it can give a thin credit file a real boost. If the primary cardholder pays late or runs the card near its limit, it can drag you down with them.

How it works

The primary cardholder asks the issuer to add you, and you usually get your own card with your name on it. You can make purchases, but you’re not legally responsible for the bill; the primary cardholder is. That’s the key difference from a joint account or cosigning, where you’d owe the debt yourself.

Most major issuers report authorized users to the credit bureaus, but not all do, and some report only to one or two of the three. Before anyone fills out a form, the primary cardholder should call the issuer and ask:

• Do you report authorized users to Equifax, Experian, and TransUnion?
• Does the full account history appear, or only activity from today forward?
• Is there a minimum age for authorized users?
• Can I set a spending limit on the authorized user’s card?

What makes it help or hurt

The account’s track record becomes part of your file, so look at it the way a lender would:

• Payment history. It’s 35% of a FICO score. One late payment on that account can appear on your report too.
• Balance relative to the limit. A card that’s usually maxed out raises your utilization and can lower your score.
• Age. An account opened 12 years ago can lengthen your credit history overnight.

Scoring models don’t all treat authorized-user accounts the same way, and some lenders look past them when reviewing an application because they know you’re not the one paying. So think of it as a head start, not a substitute for credit in your own name.

Understanding Credit Score explains the scoring factors, and How to Check Your Credit Score for Free shows how to check whether the account has appeared.

Talk about the rules first

This works best between people who trust each other and have talked through the details. Decide:

• whether you’ll get a physical card at all (many people never use it)
• if you do spend, how and when you pay the primary cardholder back
• what happens if either of you wants to end the arrangement

Remember that the primary cardholder takes on the risk. If you run up $1,500 in charges, the issuer will expect them to pay it. And you’re relying on them to keep paying on time, since their mistakes become your mistakes.

Check, then build your own credit

A month or two after being added, pull your credit reports and confirm the account shows up with the right information. If it shows late payments or a high balance, you can ask the primary cardholder to remove you, and the account usually drops off your report afterward.

The end goal is a credit history built on accounts you’re responsible for. Once the authorized-user account has given you some history, a starter or secured card in your own name is the natural next step. How to Raise Your Credit Score covers that next step.

Sources

• Experian: Will being an authorized user help my credit?
• myFICO: What’s in your credit score
• CFPB: Am I liable for debt on a card where I was an authorized user?

This article is for educational purposes and is not financial advice.