Do you have no credit or bad credit? Are you looking for ways to increase your score? Becoming an authorized user may help. It shouldn’t replace your own good habits, but it may give your credit score a boost. 

What is an Authorized User?

Authorized users have permission to be on someone else’s credit card account. The primary cardholder is the person who qualified for the account. You may charge to the account. You may not make changes to it.

An authorized user is different than a joint credit card holder. 

What are the Benefits?

As an authorized user, you earn many benefits:

  • You get the ‘good credit history’ if the cardholder makes payments on time 
  • If the cardholder keeps a low balance (less than 30% of the total credit line), it helps your credit score
  • Your credit score doesn’t matter, only the primary cardholder qualifies for the account
  • You aren’t responsible for payments (but you should always pay for what you charge)

Does an Authorized User’s Credit Affect the Cardholder?

Your credit doesn’t affect the cardholder, but the cardholder’s credit may affect you. If the cardholder stops making payments, it reflects negatively on your credit report, just as it does theirs.

Before you become an authorized user, make sure you know the person’s credit habits. Only the cardholder may remove you from the account, so you’d be stuck with the bad credit if things went south.

How Much will your Credit Score Increase as an Authorized User?

If you’re starting from scratch, becoming an authorized user may increase your credit score. Typically, borrowers starting with a 550-credit score or lower see a 10 percent increase within 30 days and a 30 percent increase within 12 months.

This means a 550-credit score may increase to 605 within a month and 700+ in a year (if everything else is good, including the payment history).

Does an Authorized User get a Credit Card?

Each credit card company has its own rules. If you want charging privileges, make sure the company offers a card to authorized users. Also make sure the cardholder allows you to make purchases.

Using someone else’s credit card can cause relationship issues if you aren’t careful. Have an agreement between one another regarding handling transactions/payments to avoid arguments and ill feelings.

Do all Credit Cards Report Authorized Users?

Some credit card companies don’t report authorized users. The only way to find out is for the cardholder to ask. If they don’t report the card on your credit report, the benefits of becoming an authorized user don’t exist.

Before you ask a family member (or close friend) to be an authorized user, think about the consequences. Do you have a good relationship that finances won’t ruin? Does the cardholder have good credit habits? Can you improve your credit score any other way?

Answering these questions helps you determine if becoming an authorized user makes sense or if you should use other credit score building tactics. 

Hope this helps!

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