Does being an authorized user affect your credit?

In a Nutshell

Being an authorized user on a credit card could affect your credit positively if the account holder makes on-time payments and keeps the credit utilization rate low. If they don’t, your credit could take a hit.
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Becoming an authorized user on someone else’s credit card can be a simple and effective tactic if you’re still working to establish your credit.

While it’s certainly not a substitute for building up your own credit history, it may be a good way to give your credit a nice boost as you’re getting started.

The flip side? Your credit history and credit scores can be hurt if the primary account holder doesn’t stay on top of their payments. If you’re an authorized user, late payments can affect your credit along with the account holder’s.

Before taking the plunge, here’s what you need to know about becoming an authorized user on a credit card.

What does it mean to be an authorized user?

Being an authorized user means you can use someone else’s credit card in your name. You can make purchases and use the card as if it were your own, but you’re not the primary account holder.

To make you an authorized user, the primary account holder simply adds your name to their credit card account, giving you authorization to use it. You’ll receive a credit card tied to the account, though you won’t have all the privileges of the primary account holder. For example, you probably won’t be able to make changes to the account, like requesting a credit increase or adding more authorized users.

As an authorized user, you’re not legally responsible to pay the credit card bill or any debts that build up. This is still the primary account holder’s responsibility.

How being an authorized user affects your credit

The accounts that you’re an authorized user on will likely appear on your credit reports — most, but not all, credit card issuers report account activity to an authorized user’s credit reports. Before you’re added as an authorized user, you may want the primary account holder to ask their credit card issuer whether it reports authorized user accounts to the three major credit bureaus.

If the card issuer reports to the bureaus, then the account will typically show up on your credit reports within 30 to 45 days. But keep in mind that not all issuers report to all three bureaus — and if they do, the timing of when issuers report to credit bureaus can vary.

If the account does show up on your credit reports, the primary account holder’s actions could impact your credit for better or for worse. (Exactly how much it will affect your credit depends on the scoring model, as different models weigh credit factors differently.)

  • If the primary account holder has a strong history of on-time payments, this can have a positive impact on your credit. And if the account’s credit utilization rate is low, this can also be good for your credit. You can figure out your utilization rate by dividing your total credit card balances by your total credit card limits.
  • On the other hand, if the primary account holder misses a payment on the card, your credit can take a beating — just one late payment can have a severe negative impact. The same goes for high credit utilization on the account.

Who should you ask to add you as an authorized user?

Make sure you select someone you can trust who practices healthy credit habits — most importantly, someone who pays their bills on time and keeps their credit utilization low.

Think carefully before you make your decision — though there’s potential upside to being an authorized user, putting yourself on the wrong person’s account could have a detrimental impact on your scores.

An important point to note is that the primary account holder’s credit scores will not be affected by adding you as an authorized user, even if your credit history is limited or needs work.

What’s the difference between being an authorized user vs. a joint account holder on a credit card?

Some credit card issuers may give you the option of opening a joint credit card. The key difference between being an authorized user and being a joint account holder is that you have more responsibility as a joint account holder. With a joint account, you’re legally responsible to pay off any debts that accumulate.

The process of being added to an account is also stricter — lenders will expect you to meet their requirements, like you’re applying for a credit card on your own. Authorized users usually won’t run into this problem, as there’s generally no credit check involved.

The authorized user strategy is common for parents who want to help their children build credit. If your parent has established a positive credit history, you may want to ask them to add you as an authorized user.

Joint accounts are more commonly used by spouses who share their finances with each other and don’t mind each person having the same credit limit.

Not all credit cards and issuers allow joint card accounts.

Next steps

Think carefully before you decide to become an authorized user on a credit card. Adding yourself to an account that’s in good standing can get you one step closer to better credit scores as well as access to products and rates that you may not have otherwise qualified for. But remember, your credit could also be negatively affected if you’re added to an account, then payments are late or missed. If you’re looking to build your credit from scratch, you might want to consider another option, such as getting a secured credit card.