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.