Being an authorized user on a credit card account means that you are able to use the credit card, but are not financially responsible for paying the bills. The primary cardholder is the one who is responsible for paying the bills, but as an authorized user, your credit history will be impacted by the account.
Being an authorized user can have a positive impact on your credit score if the primary cardholder manages the account responsibly. This includes making payments on time and keeping the balance low. It can also have a negative impact if the primary cardholder misses payments or has a high balance.
What is an authorized user?
An authorized user is someone who is added to a credit card account by the primary cardholder. The authorized user is given the ability to use the credit card, but is not financially responsible for the account. The primary cardholder is the one who is responsible for paying the bills and managing the account.
Who can be an authorized user?
Anyone can be an authorized user on a credit card account. This can include family members, friends, or even business partners. However, the primary cardholder must agree to add the authorized user to the account and must be responsible for paying the bills.
What is the minimum age to be an authorized user?
There is no minimum age to be an authorized user on a credit card account. However, most credit card companies require the primary cardholder to be at least 18 years old, so if the authorized user is underage, the primary cardholder will have to be an adult.
Will my credit be affected as an authorized user?
Yes, your credit will be affected as an authorized user. The account will be reported on your credit report, and your credit score will be impacted by the primary cardholder’s management of the account.
The risks of being an authorized user
One of the main risks of being an authorized user is that you have no control over how the primary cardholder manages the account. If they miss payments or have a high balance, it will negatively impact your credit score. Additionally, if the primary cardholder is unable to pay the bills and the account becomes delinquent, it can damage your credit history.
How to get added as an authorized user
To get added as an authorized user on a credit card account, you will need to ask the primary cardholder to add you to the account. They will need to contact the credit card company and provide your personal information, including your name, address, and social security number.
Authorized user vs co-signer
An authorized user and a co-signer are both added to a credit card account, but they have different responsibilities and liabilities.
An authorized user is someone who is added to a credit card account by the primary cardholder, but is not financially responsible for the account. The primary cardholder is the one who is responsible for paying the bills and managing the account. The authorized user is only able to use the credit card and will be listed on the account, but will not be held liable for any unpaid bills.
A co-signer, on the other hand, is a second person who is added to the account and is also financially responsible for the account. The co-signer is also listed on the account and is liable for any unpaid bills. Co-signers are usually added to the account to help the primary cardholder establish credit or to help them qualify for a credit card with more favorable terms.
When comparing the two, it’s important to remember that co-signers are liable for any unpaid bills, and their credit score will be affected by the primary cardholder’s management of the account. Authorized users, on the other hand, will not be held liable for unpaid bills, but their credit score will be affected by the primary cardholder’s management of the account.
FAQ
How long does it take for an authorized user account to show on a credit report?
It typically takes about 30-45 days for an authorized user account to show up on a credit report. However, this can vary depending on the credit bureau and the credit card company.
Will my credit score go down if I become an authorized user?
It is possible for your credit score to go down if you become an authorized user if the primary cardholder is not managing the account responsibly. This includes missing payments or having a high balance. However, if the primary cardholder is managing the account responsibly, it can help improve your credit score.
Can an authorized user be denied?
Yes, authorized users can be denied by the primary cardholder or the credit card company. The primary cardholder has the right to add or deny anyone they choose as an authorized user on their account. The credit card company may also have restrictions or requirements for adding authorized users, such as age restrictions or limits on the number of authorized users. It’s important to note that typically, a hard credit pull is not made when an authorized user is added to a card, so the reasons for denial might not be related to the creditworthiness of the authorized user, but rather to other factors such as age or number of authorized users.
Will adding my child as an authorized user help his credit?
Adding a child as an authorized user can be a useful strategy to help a teenager establish and begin to build credit several years before they will actually need to use it. However, it is important that the child is responsible and understands the responsibility that comes with using a credit card. Parents should monitor their child’s use of the card and ensure that the child understands the consequences of not using it responsibly, as it can negatively impact the primary cardholder’s credit score as well as the teenager’s. It is important that only responsible teenagers should be added as an authorized user.
Do authorized users have spending limits?
Yes, authorized users typically have spending limits set by the primary cardholder or the credit card company. However, the primary cardholder is responsible for paying any bills incurred by the authorized user.
Do authorized users have to pay credit card bills?
No, authorized users are not financially responsible for paying credit card bills. Only the primary cardholder is responsible for paying the bills.
How much will my credit score go up if I become an authorized user?
The impact on your credit score as an authorized user can vary depending on how the primary cardholder manages the account. If the primary cardholder is managing the account responsibly, it can help improve your credit score. However, it is difficult to predict by how much your score will go up.
