How is being an authorized user affecting your credits?

There are many ways to improve your credit score. You can open a secure card, look into alternative credit scoring methods, keep your current credit account, pay off unpaid debts, and improve your score as your credit age increases.

Alternatively, you can become a certified user with someone else’s credit card.

An authorized user is someone who can make purchases with someone else’s credit account. For example, you often add partners or spouses as credit card authorized users. Parents may also add teenagers as teenagers to help them build their credit history and learn to use their credit responsibly.

Authorized users will receive credit cards connected to the primary card holder’s credit line, but will not be liable for repayment of fees earned with those cards. Anyone with a name in their credit account is entirely responsible for all fees made to their card.

In other words, if you make someone a certified user with a credit card and they carry out huge debts, you are the one who is responsible for paying off your credit card debt in the end.

Does being an authorized user affect your credits?

Being an authorized user can affect your credit in both positive and negative ways, but it cannot affect your credit either. There are two factors that need to be considered.

1. Whether the lender has reported the certified user to the credit department
2. Whether both the credit account owner and the authorized user use the shared account responsibly

For an authorized user account to affect credit, the lender or credit card issuer must report the account to three major credit bureaus (Equifax, Experian and Transunion). If the lender does not report activity to the credit department from authorized user accounts, those accounts will not affect your credit rating.

To affect your credit score, your credit report must show approved user accounts. As to how long it takes for an authorized user to display on a credit report, you may see the score change as soon as the lender starts reporting that information to the credit office.

Once an approved user account is part of your credit history, you can benefit your credit score as long as both you and the primary account owner are using your account responsibly. For example, if the account holder pays regular payments regularly, they will also receive credits for these payments (intended for PUN), which could increase their credit score. On the other hand, if you and the credit account owner perform a high turnover balance on your credit account, both of your credit scores could be hit.

How do authorized users build credits?

If credit account holders maintain a responsible credit habit that helps them grow their credit score, such as paying on time or paying off their full balance, credit users build their credits.

In addition to the certified user card, you can also create a credit by deleting at least one credit card in your own name. A secure credit card is a great way to build credit. You put a small deposit in exchange for a small credit line. Once you prove that you can handle your credit card responsibly, you will regain your deposit and receive an increase in your credit line. Here are the best secure credit card recommendations:

If you want to take out a secure credit card, you can also look up the top credit card picks for people with poor credit. These cards may have lower interest rates and rewards than cards from people with good or good credit, but they are solid options for those looking to build a credit score.

Risk of being an authorized user

Being an authorized user always has risks.

First of all, be aware that being a certified user may not affect your credit score at all. For your credit account to affect your credit score, you must report it to the Credit Bureau. If the credit card issuer does not report approved user activity to any of the three credit departments, your credit score will not be affected.

If the publisher reports it, being an authorized user can hurt you as easily as it helps. If the primary cardholder runs a large balance or pays the invoice late, piggybacks on someone else’s credit card account can backfire.

If being an authorized user starts to negatively affect your credits, you can remove yourself from the equation. Often, you simply need to call or send an online request to the credit card issuer and remove yourself from your account.

Graduation to primary card holder

When starting a credit journey as a certified user, it is important to establish some goals before diving in the blind. And one of them is your exit plan. You probably don’t want to be a licensed user forever, but it’s a great opportunity to learn how to use credits wisely while you are. By taking on your responsibilities as an authorized user, when you are ready to take the next step, you are committed to building strong credit habits while establishing a credit score that you can use to your advantage.

Bankrate credit card lead writer Benét Wilson began his journey as a credit card user by becoming a certified user. She thanked her for the cardholder perks available to her and the opportunity that it would make her a major cardholder.

Ideally within a year or two, consider applying for your own starter credit card when you are ready to take the next step. By this point you will need a credit score that will allow you to become the main cardholder of your next card. Best starter credit card recommendations.

Now you may wonder whether deleting yourself as a certified user will affect your credits, and the short answer is potential. If the credit account you are deleting is the oldest credit line, this will shorten your credit history. The length of your credit history accounts for 15% of your overall FICO score, so your score may be affected. However, applying for a credit card as soon as possible can minimize the impact. After all, payment history has a greater impact on your overall creditworthiness than the length of your credit history.

Conclusion

Being an authorized user can help you build your credit history and increase your credit score, but it should not be the only tool in the Credit Building Toolbox. You also need to take out your credit cards in your name, practice using those cards responsibly and see your score improve over time.