Will Adding Myself As An Authorized User Help My Credit?

If you live in the United States, you probably know that having good credit is essential for doing things, such as buying a car, buying a home, renting an apartment, and even finding a job. So, you might be wondering whether adding yourself as an authorized user on someone else’s credit card will help your credit? We will answer this question in much detail below.

Will Adding Myself As An Authorized User Help My Credit?

Adding yourself as an authorized user on another person’s credit card can help your credit so long as the person’s credit card you’re adding yourself onto as an authorized user has a lengthy history of on-time payments. After adding yourself as an authorized user to an account in good standing, you should notice a boost in your credit score.

Adding yourself as an authorized user is one of the quickest ways to quickly build credit. That said, if the primary user on the credit card misses payments or anything negative happens to the account, your credit score will suffer, as well. So, only add yourself as an authorized user on another person’s credit card if you know that they are responsible enough to continue making timely payments on their credit card.

That said, if you want to build your credit, you should not solely rely on adding yourself as an authorized user, you should do the following to build strong credit:

  • Make your credit card and loan payments on time
  • Lower the balances on your credit and loan accounts
  • Don’t apply for too many credit cards and loans within a short period of time
  • Keep old accounts open to boost the overall age of your accounts
  • Periodically check your credit report and dispute any inaccuracies on it

What Does Adding Yourself As An Authorized User Mean?

Adding yourself as an authorized user on another person’s credit card means that the primary account holder contacts the card issuer and asks the card issuer to add your name to their account and issue you a credit card for the same account with your name on the credit card.

Once you’ve been added to their account as an authorized user, the credit history behind the credit card is added to your credit report as if you had opened the account. That said, only the primary cardholder is responsible for making payments on the car, the authorized user is not responsible for making payments on the account.

Since the primary cardholder is responsible for making payments on the account, you as an authorized user and the primary cardholder should have an agreement as to what you can and cannot spend on the credit card, so that the primary cardholder continues to make timely payments on the account.

In addition to adding yourself as an authorize user, you should explore the option of applying for your own credit card.

How Does Adding Yourself As An Authorized User Affect Your Credit?

When you add yourself an authorized user on another person’s credit card, the credit history on the credit card will appear on your credit report. For example, if your dad adds you as an authorized user on his Bank of America Visa Card that he’s had for 5 years and has made every single payment on time, his credit card account will be added to your credit report, meaning his entire payment history will appear on your credit report. If he’s made every single payment on time and the account is in good standing, you will notice a significant boost in your credit score, especially if you’re starting off with a low credit score.

So, if you know someone with an established account that has a good payment history, low balance, and has been open for a long amount of time, you will definitely benefit from adding yourself as an authorized user to that person’s account.

That said, once the primary cardholder adds you as an authorized user, your credit will be affected once the account only once the account is reported on your credit report. After the account appears on your credit report, you should notice a boost so long as the account is in good standing and has been paid on time.

If the primary account holder, for any reason, fails to make a single payment, your credit score could suffer greatly as a result. So, be careful who you ask to add you as an authorized user because their actions on the account will affect your credit score so long as you’re an authorized user on the account.

Alternatives to Adding Yourself As An Authorized User to Help Your Credit?

Whether you’re just applying for your first credit card or you’re rebuilding your credit, the best alternative you have to adding yourself as an authorized user is to apply for a secured credit card.

A secured credit card will help your credit just as a regular unsecured credit card would. That said, the difference between a secured credit card and a regular credit card is that to obtain a secured credit card, you will have to place a security deposit with the credit card issuer to obtain the credit card.

Usually, your security deposit will determine your credit limit. For example, if you give your credit card issuer $500, your credit limit will be set at $500. The card issuer will then keep the security deposit and will refund your money if you use your secured credit card responsibly and make all of your payments on time for at least 12 to 18 months.

Also, if you pay off the balance on your secured credit card and choose to close down the account, your security deposit will be refunded to you.

The credit card issuer only keeps the security deposit as collateral in the event that you fail to pay off the balance on the credit card.

That said, a secured credit card is a great way to build and help your credit so long as you use the credit card responsibly and make all of your payments in full and on time.

Missing even a single payment on a secured credit card, regular credit card, or loan can cause significant damage to your credit score, so if you want to improve your credit, make sure to make all of your payments on time.

What Are The Disadvantages of Adding Yourself As An Authorized User?

We have discussed the fact that adding yourself as an authorized user on another person’s credit card can help your credit, however, just as adding yourself as an authorized user can help your credit, it could hurt your credit just as much.

When you add yourself as an authorized user to another person’s credit card, the account is added to your credit report. This means that if the primary account holder misses any payments or stops making them, your credit will suffer just as if you had stopped making payments on your own credit card.

Also, if the primary cardholder had missed payments in the past, your credit may be negatively impacted, as well. So, before anyone adds you as an authorized user to their credit card account, you should ask them about their past payment history and whether they’ve missed any payments or have a high account balance. Having any of these things may hurt your credit instead of helping it.

How To Build Your Credit Without Adding Yourself As An Authorized User?

  • Make your payments on time – The best thing you can do to help your credit besides adding yourself as an authorized user to another person’s account is to make your credit card and loan payments on time. Your payment history accounts for 35% of your credit score, so making your payments on time will help your credit. Missing even a single payment can cause significant damage to your credit. So, avoid it if possible.

  • Reduce your account balances – The second best thing you can do to help your credit is to pay down your account balances to decrease your credit utilization. Your credit utilization accounts for 30% of your credit score, so paying down credit card debt and other loans will help your credit score.

  • Don’t apply for too much credit – The third thing you can do to help your credit is to avoid applying for too many credit cards and loans within a short period of time. This is so because each time you apply for a credit card or loan, a hard inquiry is placed on your credit report when your lender or creditor views your credit report. Although a single hard inquiry will only lower your credit score by 5 to 10 points, too many hard inquiries within a short period of time can cause a significant drop in your credit score.

  • Account age – The fourth thing you can do to help your credit is to keep old accounts open. This is so because the older your accounts, the higher your credit score will be. So, although it may be tempting to close down an old credit card that you barely use, you should keep it open to avoid a drop in your credit score.

Bottom Line

Adding yourself as an authorized user on another person’s credit card can help your credit score so long as the credit card you’re adding yourself onto has an excellent history of timely and complete payments. That said, just as adding yourself as an authorized user can help your credit score, it can hurt you if the primary account holder fails to make payments on the credit card. So, be cautious whose account you add yourself to as an authorized user, make sure it’s someone reliable who will continue to make full and timely payments.