Build Credit Quickly as An Authorized User on a Credit Card

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Find out how being an authorized user can improve your credit score with almost zero effort on your part

Two Credit Cards on Magazine
Photo Credit: Leeloo Thefirst

Building credit and getting a good credit score can seem like a Catch-22. How are you supposed to get approved for a loan or a credit card when you have a poor or limited credit history? Yet you cannot improve your credit score without showing that you are responsible at managing credit.

One tactic to easily and quickly establish your credit or boost your credit score is to be added as an authorized user to someone else’s credit card account.

When I added my girlfriend to my Capital One card, her credit score increased by 28 points after 30 days.

What is an Authorized User on a Credit Card

An authorized user is someone the primary account holder has given access to piggyback on their credit card account. The person is “authorized” to make purchases with a credit card linked to the account. The authorized user can’t perform administrative functions like closing the account, changing the billing address, or requesting credit increases.

Anyone can be an authorized user on a credit card as long as they meet the issuer’s minimum age requirements. While anyone can be added as an authorized user, it is usually someone the account owner trusts, such as a spouse, child, partner, or even friend.

Once approved, the authorized user will be issued a credit card in their name to use as if it were their card. However, the liability for making the monthly payments is still the primary cardholder’s.

Advantages of Credit Card Authorized Users

Besides piggybacking on the positive credit behavior from the primary cardholder to give you an initial boost on your credit score, there are additional benefits to being an authorized user.

Easy Access to a Credit Card

Since the primary cardholder is responsible for making payments on the account, the authorized user can get quick access to a credit card without a hard credit inquiry or having to go through more stringent qualifications to be approved for a new account.

Help Build Credit Quickly

Authorized users benefit from the established account and payment history of the account owner. When the account is used responsibly, it will usually result in a credit score bump within a couple of months.

New credit card users can learn how to use a credit card responsibly while building credit. Authorized users interested in repairing their credit can be proactive in staying on budget and ensuring payments are made on time by the primary cardholder.

Most issuers report the card’s activity on the authorized user’s credit report. However, some issuers don’t do this. The account owner can call the issuer and ask if unsure. With banks that report the card’s on-time payment history to the credit bureaus, you can start building a positive credit history.

Easier Family Expense Tracking

Having family members or a partner on an account can help simplify household and shared expenses. Parents can add their children as authorized users to teach them about credit and keep tabs on their spending.

Since you get one bill with all the charges listed at the end of the month, you are less likely to forget to make a payment than if you gave them one of your spare credit cards to use.

Tracking spending will be easier with each user having their own card and card number. Many issuers allow you to filter and sort charges by card on their website.

Help with Earning Rewards

Getting rewards and extending credit card benefits is another perk that you can take advantage of. You can maximize your rewards points and get help hitting any welcome bonuses from purchases made by your additional card members.

Authorized users also get many of the benefits that the primary cardholder receives with the credit card. These may include some benefits they may not have qualified for with a less competitive credit card if their credit history was not as strong. These benefits may include rental car coverage, travel protection, airport lounge access, roadside assistance, and more.

Save on Credit Card Annual Fees

Adding an authorized user can help save money on the annual fee for certain cards. An example is the American Express Platinum Card whose annual fee is $695. A cardholder can add additional Platinum Card members for $195 each. The additional users will get many of the Platinum Card benefits without having to pay the full membership fee for the card.

Disadvantages of an Authorized User

Here are some reasons why you may not want to take the risk of having or being an additional user on a credit card.

Adding an Irresponsible User can Tank Your Credit

As the primary cardholder, the drawback of allowing someone to be an authorized user on your card is your credit score can be affected by poor financial decisions by the other party. Overspending could result in higher credit utilization ratios and even missed payments. These two factors are major components in calculating your credit score.

Some cards let the primary user set spending limits for authorized users. If that’s not possible, be sure to discuss with your additional cardholders about their usage of the card.

It Could Affect Your Relationship

Disagreements over spending and miscommunication on a card’s usage could result in strained relationships between the account owner and any authorized users.

The Account Holder Can Remove You Any Time

The primary account has complete control over the account. You can be removed as an authorized user or the account owner can lock the card anytime. If you were making a purchase, it can be an embarrassment or inconvenience when the card gets declined.

Which Credit Cards Report Authorized Users to the Credit Bureaus

The following credit card companies are known to report authorized users to the credit bureaus:

  • American Express
  • Bank of America
  • Capital One
  • Chase
  • Citibank
  • Discover
  • US Bank
  • USAA
  • Wells Fargo

If you know of any other cards that report authorized users to the bureaus, feel free to post your experience in the comments.

Best Card to Add Someone as an Authorized User

Not every card is a good choice for adding additional users. You will want to choose an account that is in good standing. Pick a credit card that has been open for several years with a consistent positive payment history and a low utilization ratio.

Unless you don’t plan to use the card, you will want to go with a card with a sufficient credit limit so any spending will stay under 30% of the available credit.

How to Become an Authorized User

The primary cardholder must add you as an authorized user to their credit card. After finding someone open to taking on that responsibility, they will need to contact their credit card company to add you to their account. This can usually be done in a few minutes online on the website or over the phone by calling the customer service number on the back of the card.

The information required for adding an authorized user varies. Expect your card issuer to request any of the following items: name, birthday, address, SSN, and phone number.

What To Do After Being an Authorized User

After being added as an authorized user, many issuers will mail a second credit card in the authorized user’s name to the primary cardholder’s address. The primary cardholder can decide whether to give the card to the authorized user.

Now regularly keep an eye on your credit score. You can check your score for free with services like Credit Sesame or Credit Karma.

As your score increases, you may want to consider leveraging your improving credit score to apply for your own credit card. That way, you can take charge of your financial destiny and not have to depend on someone else being responsible with their credit.

Closing $ense

Becoming an authorized user can be an effective way to get a quick boost on your credit score.

Credit Sesame surveyed their members and found that people with bad credit saw an average score improvement of 10% in 30 days. That figure jumped to 30% after becoming an authorized user for a year.

Keep in mind you may see a drop in your credit score if you are removed as an authorized user. This is most likely to happen when you do not have other accounts with a similar age or have little credit. To keep your credit score solid, apply for your own credit cards and keep an eye on your credit reports as your score improves.

Have you added anyone as an authorized user or have you been one on someone else’s credit card?

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