Establishing a good credit history can be difficult, especially if you’re just starting out. One way to get a head start is to have someone you trust (such as a close friend or family member) add you as an authorized user on their credit card.
Whether becoming an authorized user on a credit card will help or hurt your credit depends on how responsibly the primary cardholder manages their credit account. For starters, it’s important to understand what exactly it means to be an authorized user and what implications there are for you and the primary cardholder.
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What is an authorized user?
An authorized user is essentially a secondary cardholder—someone who can use another person’s credit account as if it was their own. As an authorized user, you’ll receive your own credit card and account number. You’ll have access to the primary cardholder’s credit line and will be able to make purchases.
If the primary cardholder has been making consistent, on-time payments for a long time, their positive history will be added to your credit report, immediately improving your credit score (or making you scorable if you previously had no credit accounts and thus no score at all).
Can authorized users be held liable for debt?
No, authorized users aren’t liable for the credit card debt they accrue. 1 Only the primary account holder is liable. This is what distinguishes an authorized user from a cosigner or the co-owner of a joint credit card.
Bear in mind, however, that as an authorized user, you also won’t have the same rights as the primary cardholder. For example, you won’t be able to increase the credit line, add other authorized users, or close the account. 1
Essentially, being an authorized user is a bit like being a “guest” on someone else’s credit account rather than a joint owner.
Can I build credit by being an authorized user on a credit card?
Yes, because the account holder’s payment history will usually be added to your credit report, becoming an authorized user on someone else’s credit card account can help you quickly build credit without the need to open any new credit accounts of your own. For this reason, it’s a popular approach among people with insufficient credit history or a bad credit score.
Remember that the level of improvement you’ll see in your credit score depends on how well the primary cardholder manages their account. If they use the account irresponsibly, your credit score might actually suffer—we cover this in more detail below.
How being an authorized user affects your credit
The following factors will influence how the account affects your credit:
- Payment history: The most important factor influencing how the account will affect your credit score is whether the primary cardholder is making consistent, on-time payments. If they are, your score will go up, whereas if they tend to miss payments, you’ll see no benefit and your score might even suffer.
- Length of credit history: All other things being equal, you’ll reap more benefits from being an authorized user on an old account than a fairly new account.
- Credit utilization rate: Another important factor to consider is the percentage of their credit limit that the primary cardholder is using. Your score will suffer if they max out their credit card, whereas your score will benefit the most if they use no more than 10% of their credit limit. 2
It’s also worth noting that newer scoring models produced by FICO and VantageScore weight account information differently for authorized users than for primary account holders. 3
This is part of efforts to stop fraudulent credit piggybacking where people with low credit scores pay third-party companies to have another person’s positive credit information falsely added to their credit report. Therefore, it’s also possible that you’ll notice little or no change to your credit score when you become an authorized user.
Are authorized users always reported to the credit bureaus?
Not every credit card issuer reports authorized users to the credit bureaus. Contact the company in question to check whether they’ll report your account information to the three main credit bureaus (Experian, Equifax, and TransUnion).
What’s more, each bureau has its own way of reporting authorized users. For example, Experian won’t include negative payment information like late payments in your credit report if you’re an authorized user, whereas other credit report agencies might.
How long does it take for authorized user status to show up on my credit report?
If your credit card issuer does report to the credit bureaus, you’ll likely see the account show up on your credit report in a couple of months after you’ve been added as an authorized user. 4
Can being an authorized user hurt my credit?
Yes, it’s possible that you’ll see a sudden drop in your credit score if the primary cardholder fails to make on-time payments or maxes out their credit card.
To protect your credit score, ask the cardholder to see their current account activity and past history before agreeing to be added as an authorized user.
Can I remove an authorized user from my account?
Yes, if you’re the primary cardholder, then you can remove an authorized user from your credit card account at any time. Once they’re no longer linked to your account, your account activity will no longer have any impact on their credit history, and vice versa.