Authorized User Strategy: Building Credit Through Others

One of the fastest ways to build credit is to "borrow" someone else's good credit history. The authorized user strategy can add years of positive history to your credit report almost instantly.

What Is an Authorized User?

An authorized user is someone added to another person's credit card account. The primary cardholder is responsible for all payments, but the account appears on both credit reports.

Key points:

• The AU gets a card with their name
• The primary holder pays the bill
• The account history reports to AU's credit
• The AU is not legally responsible for the debt

How It Builds Credit

The authorized user account adds to your credit file:

1. Payment history - All on-time payments from the primary
2. Account age - The card's full history, including years before you were added
3. Credit limit - Adds to your available credit, lowering utilization
4. Account count - Another account in your credit mix

Who Benefits Most?

Ideal candidates:

• Young adults with no credit history
• Immigrants new to U.S. credit system
• People recovering from credit problems
• Anyone with a thin credit file

Finding the Right Account

Not all cards work equally well for this strategy. Look for:

Must-haves:

• Perfect payment history (zero late payments ever)
• Low credit utilization (under 10% ideal)
• Long account age (older is better)
• Reports to all three bureaus

Nice-to-haves:

• High credit limit
• Low or no annual fee
• Issuer that reports authorized users (most do)

Which Banks Report Authorized Users?

Most major issuers report AU accounts, but verify:

Usually report AU accounts:

• American Express
• Bank of America
• Capital One
• Chase
• Citi
• Discover
• Wells Fargo

Often don't report:

• Some credit unions
• Some store cards

The Family Approach

The most common authorized user relationships:

Parent → Child

• Parents add children to build credit early
• Child can use card for small purchases or not at all
• Great for college students

Spouse → Spouse

• Share credit history with partner
• Useful when one spouse has stronger credit
• Common before major purchases like homes

Family member → Family member

• Grandparents, siblings, aunts/uncles
• Requires high trust

Risks for the Primary Cardholder

Adding an authorized user has risks:

1. AU spending - They can use the card
2. No control - Can't always monitor purchases in real-time
3. Still liable - Primary pays even if AU overspends

Mitigation strategies:

• Don't give AU the physical card
• Set up alerts for all transactions
• Keep the credit limit low
• Only add people you deeply trust

Risks for the Authorized User

Being an AU also has risks:

1. Primary's mistakes affect you - Late payments hurt your score too
2. High utilization - If primary carries balances, hurts your score
3. Removal complications - May be hard to get account removed

Removing Yourself as an Authorized User

If the account starts hurting your credit:

1. Call the issuer - Request removal from the account
2. Contact credit bureaus - Ask for the account to be removed from reports
3. Timeline - Usually 1-2 billing cycles for removal

You have the right to be removed at any time without the primary's permission.

The Strategic Timeline

For building credit from scratch:

1. Get added as AU on a parent/family member's old, clean account
2. Wait 1-3 months for it to report
3. Apply for your own secured or student card
4. After 6-12 months, your own history supports your score

For credit repair:

1. Get added to boost scores quickly
2. Use improved score to qualify for better products
3. Continue building your own positive history
4. AU boost becomes less necessary over time

Does AU History Stay Forever?

Once you're removed:

• Some bureaus remove the account from your report
• Others keep the historical data
• The benefit typically fades after removal

The goal is to use AU status as a bridge to building your own strong credit.

Authorized User vs. Joint Account

These are different:

Joint accounts are more complex and typically reserved for spouses.