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When should you remove yourself as an authorized user?

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If you want to build your credit, becoming an authorized user on someone else’s credit card could be a good option. When you become an authorized user on another person’s credit card — whether that person is a spouse, a parent or another close family member — you have the opportunity to benefit from the primary cardholder’s positive credit habits.

How can becoming an authorized user help you improve your credit score? Many credit issuers report authorized user accounts to the three major credit bureaus, which means that every time the primary cardholder makes an on-time payment or pays off an outstanding balance, their responsible credit activity becomes part of your credit history as well.

Before you agree to become an authorized user on a credit card, it’s a good idea to know how to remove yourself as an authorized user, and when to begin the removal process.

“Anyone seeking to be an authorized user on someone else’s card needs to have a goal and exit strategy from the onset,” explains Lawrence Delva-Gonzalez, a Treasury Department auditor who shares community-driven financial advice at The Neighborhood Finance Guy.

We asked Delva-Gonzalez when a person should consider removing themselves as an authorized user. If the primary cardholder is using credit responsibly, can you continue the authorized user relationship indefinitely? If the primary cardholder begins missing payments or running up a high balance, should you end the relationship immediately?

Here’s what we learned and what you need to know.

Choose your primary cardholder carefully

The first step in becoming an authorized user is to choose your primary cardholder. Many people ask spouses, partners or parents to serve as the primary cardholder. In fact, many parents make their children authorized users on their credit cards as a way to help kids build credit early.

No matter who you ask, it’s important to choose a primary cardholder who can be trusted to use their credit card responsibly.

“Whether the goal is to raise your credit score or have access to credit with preferable terms, you should be looking for a very creditworthy person with a high credit score and a low debt-to-income ratio,” Delva-Gonzalez explains. “This person should be financially stable.”

If you aren’t happy with your choice, you can end the authorized user relationship immediately. You may discover, for example, that the primary cardholder is less financially responsible than you were anticipating. You may also discover your new financial relationship is getting in the way of your personal relationship, which is one of the negative aspects of becoming an authorized user on another person’s credit account.

“Both parties need to articulate their intentions from the beginning,” advises Delva-Gonzalez. If you and your primary cardholder don’t agree on how to use your shared line of credit, it’s time to move on.

Plan to remain an authorized user for 1-2 years

Even if your authorized user experience goes well, you should still make a plan for removing yourself as an authorized user — and you might want to put that plan into action fairly quickly. “You don’t need to remain an authorized user for more than one or two years,” says Delva-Gonzalez.

Why should you plan to end your authorized user relationship within a couple of years? Two reasons. First, it encourages you to focus your time as an authorized user. Maintain the account just long enough to learn how to use credit and establish a positive credit history. Then, use your improved credit history to apply for a starter credit card of your own.

Second, many people don’t realize that becoming an authorized user might not help their credit as much as they might hope — especially under the FICO 8 scoring model, which is now the most common credit scoring model used by lenders. “Basically, your credit score can improve but your FICO score can lag behind,” says Delva-Gonzalez.

End the relationship early, if necessary

If your primary cardholder begins practicing bad credit habits — such as missing payments or maxing out credit cards — end your authorized user relationship as quickly as possible.

Some lenders don’t report missed payments on an authorized user’s credit report, since the authorized user is not responsible for making payments on the card. However, a missed credit card payment is often followed by a high credit card balance. And even if you are only the authorized user on the account, that high balance could become part of your credit history.

“If a primary cardholder runs up a high balance and intends to carry said balance for a long time, it’s likely best to part ways,” says Delva-Gonzalez. Since both your FICO credit score and your VantageScore credit score pay careful attention to your credit utilization ratio, a high credit card balance could hurt your credit.

Get your own credit card as soon as possible

Some people wonder if removing themselves as an authorized user will damage their credit score by lowering their length of credit history. The best way to avoid this problem is by opening your own credit card as quickly as possible — even if you’re currently an authorized user on someone else’s account.

“If you have a credit account that’s six years old and an authorized user account for the same timeframe, the length of your credit history remains the same even if one account gets crossed out,” says Delva-Gonzalez. “However, if you have a credit account that’s two years old and an authorized user account that’s eight years old, removing the authorized user account could hurt your credit score.”

Keep in mind there are many variables involved in credit scoring. Removing an authorized user account on a maxed-out credit card, for example, could help your credit score even if it lowers your length of credit history. That said, it’s important to open your own credit card as soon as you can — even if you’re only eligible for a secured credit card. With a line of credit under your own name, you’ll be able to make smart authorized user decisions without having to worry about the impact on your length of credit history.

The bottom line

Becoming an authorized user on a credit card can help you begin to build your credit. Knowing when to remove yourself as an authorized user can help you take your credit even further. Don’t become an authorized user without an exit strategy. And begin applying for your own credit cards as soon as possible, so you can end your authorized user relationship without worrying how it will affect the length of your credit history.

Written by
Nicole Dieker
Personal Finance Contributor
Nicole Dieker has been a full-time freelance writer since 2012—and a personal finance enthusiast since 2004, when she graduated from college and, looking for financial guidance, found a battered copy of Your Money or Your Life at the public library. In addition to writing for Bankrate, her work has appeared on CreditCards.com, Vox, Lifehacker, Popular Science, The Penny Hoarder, The Simple Dollar and NBC News. Dieker spent five years as writer and editor for The Billfold, a personal finance blog where people had honest conversations about money. Dieker also teaches writing, freelancing and publishing classes and works one-on-one with authors as a developmental editor and copyeditor.
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