Did you know that being an authorized user on someone else’s credit card can actually ruin your credit?
As an authorized user, you piggyback on someone else’s credit card usage, payment history, and how they manage their credit card.
If they have great credit habits, then all of their great payment history, low utilization, and stellar credit management will positively impact your credit scores when you are added as an authorized user to their credit card.
But… What if the person who’s added you as an authorized user does NOT have good credit habits? If their poor payment history, high credit card balances, and poor credit usage is negatively impacting your credit scores?
While most people jump on someone else’s credit card as an authorized user to boost their credit, the opposite can happen if you aren’t careful.
Reasons to be an Authorized User
There are many reasons people choose to be an authorized user. The most common include:
- Children using their parents’ credit cards as an authorized user to build credit,
- Spouses often put their significant other on their credit card if one spouse has little to no credit, or bad credit,
- Spouses sometimes add their significant other so both can enjoy the rewards high-end credit cards offer.
Being an authorized user helps you build credit, especially when you don’t have any. Some people use it to improve their credit score if they’ve fallen on hard times and want to bounce back. Without any positive credit history, it’s difficult to get approved for new credit, and piggybacking on someone else’s credit as an authorized user can help.
But sometimes, it can backfire and you will need to remove yourself immediately.
Reasons to Remove Yourself as the Authorized User
The benefits of being an authorized user can sometimes wear off prematurely; depending on the credit habits of the person who added you. If you don’t remove yourself from their account, you will remain on it and realize the negative effects of being an authorized user only once your scores have taken a hit.
Why would you want to remove yourself from being an authorized user?
As we all know, life happens. Even someone with the best credit at one point in their life could suffer financial difficulties in the future. If that happens and you’re still an on their credit card as an authorized user, your credit could suffer too.
If the cardholder suffers financial difficulties, any of the following could negatively affect your credit score:
- Late payments
- Overuse of the credit line (usually over 30%)
- Carrying large balances
The point of becoming an authorized user was to improve your credit, not hurt it, but it goes both ways. How the cardholder pays and uses their card will affect how your credit is impacted; good or bad.
Removing Yourself as the Authorized User
If you've decided to remove yourself as an authorized user, we’ve outlined two methods that you can follow below.
The easiest method is for the primary cardholders to call their credit card company and tell them they would like to remove you as an authorized user on their account. They must provide your name and the last four digits of the credit card number. It’s always wise to follow up with a certified letter with the same information to ensure that the credit card company removes the user.
If you are the authorized user and want to remove yourself, you can use the same method, but you must verify your identity. They may also ask to speak to original cardholder to ensure that you are who you say you are since it’s someone else’s account.
Removing the Account from your Credit Report
Removing yourself as an authorized user isn’t the only precaution you must take if the cardholder gets into financial trouble.
If the cardholder makes payments late or overextends his/her credit, it may be poorly reflected on your credit report even though it wasn’t your doing. Once you remove yourself from the card, you can request that the credit bureaus remove the account from your credit history.
This is one of the most important steps to take. If you just remove yourself from the card, the negative information may still report on your credit report. It’s your responsibility to contact each of the three credit bureaus TransUnion, Equifax, and Experian to get the account removed. If you contact them in writing with the details of the account and the reason you need the account removed, they’ll remove it. You may also call in to have the account removed.
Please be sure to follow up! Until April 2021, all three credit bureaus offer free weekly access to your credit report. So, after about 30 days, pull your reports from all three bureaus to ensure that the account was in fact removed. If it is still being reported, follow up on your request and make sure it gets removed.
The Best Practices When Using a Credit Card
Whether you are on your own credit card or use someone else’s, it’s important to know how to manage them. Credit cards can easily get out of hand when you don’t use them responsibly.
Try sticking to the following rules:
- Only charge what you can afford to pay off in full,
- Never charge more than 10-20% of the available credit balance, but if you do make sure you can pay it off in full when you receive the statement,
- Never go over the allowed credit card limit, even if you know you'll pay it off in full,
- Make your payments on time; every time.
If you’re on someone else’s credit card and helped contribute to the balance reporting, make sure you make good on your part of the debt. Even if you have the card removed from your credit history, making good on the debt so the credit card holder’s credit isn’t too damaged either is the right thing to do. Your relationships and trust are not worth ruining over money.
Whether you have your own credit card or you use someone else’s use it responsibly. If you have your own card, you can’t have it removed from your credit history if you fall on hard times. However, if the cardholder that put you on as an authorized user has financial difficulties, you can have the account removed from your report.
Be diligent about your follow-up and ensure the credit bureaus do as you ask, removing the account from your credit history as well as removing yourself from the account.
Hope this helps!
Thank you for all that you do! You have helped me look at my finances totally differently. It is so much easier when you have someone that provides clear instructions. I’ve taken your classes and I’m in Credit On Fire and I have not been let down! You are the best Netiva!
How does one transition from being an authorized user to building your own credit?
Hi Shani, you’d simply apply and get approved for credit in your own name. Look at your credit profile, what are you scores? If you scores are under 550, get a secured card. I have a list here: https://thefrugalcreditnista.com/credit-cards/. If your scores are over 580, I’d apply for Capital One or Discovered Secured Card. If you need a credit report review for more personalized direction, visit the Services page 🙂 As long as you have both the Authorized User Card – which gives you history, Age, and Utilization – along with your card in your own name – which is newer – you should be fine. Keep stellar payment history, excellent utilization you’ll be fine. Remember, to keep inquiries to a minimum
Thank you so much Ebony!