WalletHub, Financial Company
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 calculated. 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.
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.
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Sydney Garth, Credit Cards Moderator
Being added as an authorized user will not have a significant impact on your credit score, because you're not responsible for paying the bills.
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 a good credit history. Missed payments and constantly using a lot of the available credit will negatively affect your credit score. Some credit reporting agencies do not include negative history in authorized users' credit reports.
You can track your progress and get customized advice for free by signing up for WalletHub. the only site that offers free daily credit-score updates.
Dmitriy Fomichenko, President, Sense Financial
I understand that you are trying to fix your credit. But instead of using someone else's credit card history you should focus on your own credit accounts. Be sure that you are making payments on all of your obligations, be responsible with your own finances, pay off your credit card debt, look for ways to make more income which will help you ultimately become debt free.
Shillspam, I'm sorry for offending you, that was not my intent. I did not answer your main question and was providing you with the suggestion that I believe would be most beneficial to you, based on my understanding of your question. I admit that perhaps I assumed more from there question than what your real situation is. You said that this someone else's credit account that you are authorized user for is "the only thing with 100% positive history". This tells me that all of your own credit items have some kind of negative history attached to them. I therefore made a recommendation that instead of keeping or removing yourself as authorized user (over which account you have no control), you should focus on things that you have control over, that is your own accounts. And when you do maintain your own accounts in good standing and pay them off - this will have much more positive impact on your credit than being authorized user on someone else's account. The challenge with forums like this, it is not always easy to communicate in writing both questions and the answers. I normally take the time to understand the situation of people seeking my help so that I can provide the best recommendation possible. But one thing I must say is that I will always tell what needs to be said instead of what someone wants to hear. And to some this might be offending. But the bottom line is that I truly wish to help you and would be glad to offer you a phone call (if you are willing to accept it), this way I can try helping you more efficiently after learning more about you.
Do you know what an authorized user is and what I was even asking? This is the most condescending and least helpful response I could have imagined. I'll try to be more clear so no one else is confused by it. I am an authorized user on a card that is not mine and I do not use and it always has a utilization of 99%. However, it is the oldest thing on my account by at least 20 years. Therefore, simply put, is this hurting my credit more because of the high utilization or is it helping due to being the oldest thing on my account, thereby raising the AAoA?
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