It can be hard to build your credit on your own. If you’re new to credit, you might not be able to access the kinds of credit cards that offer low interest rates and high rewards. If you’re dealing with bad credit or damaged credit, you might not be able to access many credit cards at all.
That’s where being an authorized user can help you. By becoming an authorized user on someone else’s credit account, you can piggyback off their credit history—plus, you’ll have access to a line of credit that you can use to make purchases and earn rewards.
Can you build your credit by being an authorized user on a credit card? Absolutely —but that isn’t the only reason to become an authorized user. While many people become authorized users as a way to increase their credit score and help them become eligible for more of the best credit cards, other people become authorized users in order to streamline household shopping, earn credit card bonuses and more.
Many people don’t realize the potential benefits of adding an authorized user to a credit card. Whether you’re trying to build your credit history or simply hoping to earn more rewards on a single credit account, the authorized user option might be exactly what you’re looking for. Here’s what you need to know about becoming an authorized user, how being an authorized user affects your credit score and what to do if you need to remove an authorized user from your account.
What is an authorized user?
An authorized user is a person who is authorized to use someone else’s credit account. When you become an authorized user, you receive a credit card that is connected to the primary cardholder’s line of credit. Any purchases you make on your authorized user credit card become part of the primary cardholder’s credit card balance, and the primary cardholder is responsible for making on-time payments against that balance.
How does being an authorized user impact your credit?
Being an authorized user can impact your credit in both positive and negative ways—but in some cases, it might have no effect on your credit at all.
In order for your authorized user account to impact your credit, your credit card issuer must report authorized users to the three major credit bureaus (Equifax, Experian and TransUnion). Most major issuers report authorized users to the credit bureaus, but it’s still a good idea to confirm what’s being reported. Some credit card issuers, for example, only report positive information associated with authorized user accounts. This can be good for authorized users because it means that any negative or derogatory information associated with the primary cardholder’s credit account won’t show up on the authorized user’s credit report.
If you’re asking yourself whether you should become an authorized user, you should really be asking yourself whether the person on whose account you’re planning to piggyback uses credit responsibly. If the primary cardholder has a history of on-time payments, low credit utilization and other responsible credit habits, their credit usage could have a positive impact on your credit. If the primary cardholder regularly misses credit card payments or runs up high balances, their behavior could have a negative impact on your credit. Choose your primary cardholder wisely.
Benefits of being an authorized user
When you become an authorized user, you get to reap the benefits of the primary cardholder’s responsible credit habits. The credit bureau Experian suggests that if you want to take full advantage of those benefits, you should become an authorized user on a credit account that has a long history of on-time payments associated with it— because that history could have a positive impact on your credit report, as well. This is a great way to start building credit, especially if your own credit history is limited.
Increasing rewards potential
If you become an authorized user on a rewards credit card, your purchases add to the total rewards earned on the card—which means that you and the primary cardholder could rack up a lot of points, miles or cash back. Having two people making purchases on the same credit account is also a great way to earn credit card sign-up bonuses that require you to spend a certain amount in the introductory period.
Sharing household expenses
Becoming an authorized user on a spouse or partner’s credit card account gives you the opportunity to use that credit account to make household purchases and share household expenses. Since most credit card issuers provide authorized users with their own credit cards, you can take more responsibility for the household shopping and build your credit history at the same time.
Drawbacks of being an authorized user
It could negatively impact credit
When you become an authorized user on a credit card, you adopt the primary cardholder’s credit habits as your own. If the primary cardholder makes late payments or runs up a lot of debt—or if the two of you max out your shared credit account together—it could have a negative effect on your credit score.
Primary cardholder responsible for payments
Although you can give the primary cardholder money for any charges you make as an authorized user, only the primary cardholder can make credit card payments on the account. Since both of your credit scores could be affected by late or missed payments, you should only become an authorized user if you know the primary cardholder is going to make responsible on-time payments.
Could run up more debt than you realize
When two people use the same credit account, they might make purchases that the other person isn’t aware of (and these extra purchases could turn into debt that is difficult to pay off). Some primary cardholders set limits on the amount of money an authorized user can spend to ensure that there aren’t any surprises at the end of the month.
How to add an authorized user
Adding an authorized user to a credit card is relatively easy. In many cases, you can add an authorized user through your online credit card account. You can also call the number on the back of your credit card to begin the process. Be prepared to provide your authorized user’s name, phone number, date of birth and Social Security number.
Once the authorized user has been added to your account, your card issuer will provide them with a credit card that is connected to your credit account. Some card issuers may mail the credit card directly to the authorized user and others may send you the card with instructions to pass it on.
Be aware that some credit cards come with authorized user fees. These are one-time fees that you pay when you add an authorized user to your account and can range from around $35 to over $100.
How to remove an authorized user
Removing an authorized user from your account is also relatively easy—you can begin the removal process online or by calling the number on the back of your credit card. Once you complete the process, it’s a good idea to send your credit card issuer a certified letter confirming the agreement to remove the authorized user from your account. (If you are an authorized user and you want to remove yourself from someone else’s account, follow the same two-step process.)
It’s also a good idea to retrieve the credit card issued to the authorized user to ensure they can no longer make charges against your credit account. If the authorized user will not give up the credit card, contact your credit card issuer and request a new credit card number—and don’t forget to change any automatic bill payments or subscription service payments associated with the account.
Difference between authorized users and joint account holders
Joint credit card accounts aren’t easy to find—only a small number of banks and credit card issuers offer them. That said, here are the primary differences between authorized users and joint account holders.
When you become an authorized user, the primary cardholder adds you to their credit account and gives you the ability to make purchases with their credit card. Only the primary cardholder can make payments on the credit card account, and the primary cardholder could set a limit on the amount of money you’re allowed to spend. Not all credit issuers report authorized users to the three credit bureaus, so your authorized user account might not become part of your credit history.
When you become a joint account holder, you and another person apply for a credit card together. Both of you are liable for any debt taken out on the credit account, can make payments on the account and have access to the entire credit limit associated with the account. Your credit issuer will report your joint account to the credit bureaus and it will become part of your credit history, so make sure you and the other person on the account use your joint account responsibly.
The bottom line
Becoming an authorized user can help you build your credit. Sharing a credit card with a partner or spouse can also help you work together to earn credit card rewards, manage household purchases and more.
When you are an authorized user, your credit score can be affected by the way the primary cardholder uses the account, so make sure you only become an authorized user with someone who has responsible credit habits and a good credit score. If either you or the primary cardholder wants to end the authorized user relationship, contact your credit card issuer to remove an authorized user from the account.