What Does It Mean to Be an Authorized User?
When you become an authorized user, the primary account holder adds you to their credit card account. While you get access to the card, you’re not legally responsible for making payments—the primary cardholder is. The account’s payment history, credit limit, and usage will appear on your credit report, influencing your credit score.
Benefits of Becoming an Authorized User
1. Helps Build or Improve Your Credit Score
If the primary cardholder has a history of on-time payments and low credit utilization, those positive factors will be reflected on your credit report. This can:
Boost your credit score over time
Help you qualify for loans, credit cards, or better interest rates in the future
2. No Credit Check or Hard Inquiry
Unlike applying for a new credit card, becoming an authorized user doesn’t require a hard inquiry on your credit report. Hard inquiries can lower your score temporarily, so this is a great way to improve credit without affecting your report negatively.
3. Increases Your Credit History Length
Credit age makes up 15% of your credit score. If the primary cardholder’s account is old, being added as an authorized user can extend the length of your credit history, improving your score.
4. Lowers Your Credit Utilization Ratio
Your credit utilization ratio (credit balance vs. total credit limit) plays a big role in your credit score. If the card you’re added to has a high limit and low balance, it can help lower your overall utilization, which positively affects your credit.
5. Provides Access to a Credit Card
If you have trouble qualifying for your own credit card due to lack of credit history or past financial issues, becoming an authorized user allows you to have a card in your name without needing approval from a lender.
Potential Risks to Consider
While becoming an authorized user has many benefits, there are some risks to be aware of:
🚨 Negative Payment History Can Hurt Your Credit – If the primary cardholder misses payments or carries a high balance, it could damage your credit instead of improving it.
🚨 You Have No Control Over the Account – The primary account holder controls the card and payments. If they remove you as an authorized user, you’ll no longer benefit from their credit history.
🚨 Not All Creditors Report Authorized Users – Before being added, check whether the credit card issuer reports authorized users to the credit bureaus. If they don’t, you won’t see any credit benefits.
How to Make the Most of Being an Authorized User
✔ Choose the Right Primary Cardholder – Ensure the account has a strong payment history, low credit utilization, and no missed payments.
✔ Monitor Your Credit Regularly – Check your credit report to see if the account is being reported correctly.
✔ Have an Exit Plan – If the primary cardholder’s financial habits change, consider being removed before it negatively affects your score.
✔ Use This as a Stepping Stone – Once your credit improves, apply for your own credit card or loan to continue building independent credit.