What is an authorized user on a credit card?

Yes, authorized users do build credit. You can actually build a good or excellent credit score just as an authorized user on a credit card. When you become an authorized user, the account is added to your credit report, which means on-time payments by the primary cardholder will help you build good credit history. But because authorized users are not responsible for paying the bills, credit scores don’t give authorized user accounts as much weight. So you won’t ... read full answerbuild credit as fast as an authorized as you would with your own credit card account.

Still, the fact that most credit card companies don’t have a minimum age for authorized users, means becoming one is a great way to build credit before you can get your own account. But there are a few positives and negatives you should know about before becoming an authorized user.

Here’s how authorized users build credit:

1. A friend or family member adds you to their credit card account as an authorized user.
2. The credit card account gets added to your credit reports, just like if it were your own account.
3. The issuer gives updated account information to the credit bureaus on a monthly basis.
4. Your credit standing improves if the account owner has on-time payments, low credit utilization and other signs of financial responsibility.
5. Your credit gets hurt if the account holder behaves irresponsibly.
6. You can get an account with negative information removed from your report, since you aren’t responsible for making payments.

Authorized users do build credit, but that credit can be good or bad, depending on how the primary accountholder manages balances and bill payments. So you only want to become an authorized user on an account owned by someone responsible.

But in the event that an authorized user account does end up hurting your credit, you can dispute the account to get it removed from your credit report. That’s because any mistakes made won’t be your responsibility.

Finally, you’ll build credit faster if you also have your own credit card account that you use responsibly. You can get a starter credit card once you turn 18 years old, as long as you have enough money to pay the bills.

If you have bad credit and are worried you won’t get approved, try applying for a secured credit card. Secured cards require security deposits, but they have the highest approval odds of all credit cards and accept people with bad credit.

Yes, an authorized user can affect the primary accountholder's credit score if the authorized user is able to charge purchases to the account, either with their own card or because they know the account number.

Simply adding an authorized user to an account will not have an impact on your credit score, as the owner of the account. If, for example, the authorized user has a lower credit score than you, it won't hurt your credit score by association or anything like that. But if the authorized user racks up a bigger balance than you were planning on, it could hurt your credit score by increasing your credit utilization. Expensive debt also increases the likelihood of missed payments, which would hurt your score, too.... read full answer

So, the bottom line is that an authorized user can indirectly cause some credit score damage, but not if they don't have spending privileges.

An authorized user’s credit score can get to the good- or excellent-credit range. Adding someone as an authorized user is a great, low-risk way to give your child a head-start on financial success (at any age) or to help a family member rebuild damaged credit.

It’s difficult to say exactly how much or how quickly a particular authorized user’s credit score will improve, however. A lot depends on the contents, if any, of the authorized user’s credit report and the nature of the account to which he or she is given access. Adding an authorized user to an old account with a high credit line, low utilization, and a pristine payment history will provide the best results, considering how credit scores are ... read full answercalculated. In that scenario, an authorized user could get a credit score of 700+ after a few years.

In any case, it's important to consider both the benefits (credit score and otherwise) as well as the potential barriers to adding an authorized user on an account before doing so.

Authorized Users & Credit Scores: What You Need to Know

• Credit card issuer reporting. The vast majority of credit-card issuers report authorized user information to the major credit bureaus, thus enabling the user to build credit – but not all do. You might therefore want to double-check with the issuer of your card just to be safe, especially if it’s a credit union or small bank.
• Improved credit score. It’s possible to build a good credit score just by being an authorized user. Furthermore, research shows that authorized users are more likely to have credit scores over 680 than non-authorized users.
• Disputing negative information. Because authorized users are not liable for bill payments, they cannot be held responsible for negative account activity that’s reported to the credit bureaus. Authorized users can simply remove themselves from the account and dispute the appearance of the negative information on their credit reports.
• Credit score models and lenders. Not all credit-scoring models treat records of authorized use equally, and not all lenders will be satisfied with only authorized user experience if they look more deeply into your credit history than just your score. Furthermore, it’s difficult — often impossible — to determine the exact type of credit score used by a particular lender. And since the whole point of credit improvement is to qualify for better financial products and save money, authorized use alone may not always pay off. That’s why we recommend that authorized users also open their own credit card account, even if they don’t plan to actually make any purchases with it.
• Rewards. When a primary user adds an authorized user to a credit card, the authorized user’s spending can help the primary user earn more rewards.

Next Steps:

To learn more, we recommend checking out our authorized user guide. And if you’d like to track how authorized use is affecting your credit score as well as learn how to take credit improvement to the next level, sign up for a free WalletHub account. WalletHub is the only website that offers free credit scores and full credit reports updated on a daily basis. Customized credit-improvement advice and 24/7 credit monitoring are part of the package, too.