Are you tired of trying to build good credit and maximize your credit score? It feels like no matter what you try, your credit score remains disappointing. Well, maybe you should consider adding yourself as an authorized user on someone else’s credit card account. Being an authorized user on someone’s account can have a positive or negative effect on your credit score, depending on the severity of credit activity associated with the account. In this article, you will learn about how being an authorized user affects your credit score and how it can lead to improved credit standing.
What is an Authorized User?
An authorized user is someone who has access to someone else’s credit card account. They are given the same privileges as the primary user, such as being able to make purchases on the account. However, the primary user is solely responsible for paying off any charges that the authorized user makes.
How an Authorized User Can Impact Your Credit Score
Authorized users can either have a positive or negative effect on your credit score depending on the severity of credit activity associated with the account. Here is a breakdown of different possible situations:
Positive Impact on Your Credit Score
• If the account is paid off on time and in full each month, it will positively impact your credit score by increasing your credit utilization rate. A higher credit utilization rate means that you have access to more credit and this is seen as favorable when it comes to your credit score.
• If the primary user on the account has a long history of responsible credit usage, this will also help to boost your credit score as the positive payment history will be reflected on your credit report.
• If the account’s credit limit is high, this can also increase your credit score as the higher credit limit will improve your credit utilization rate.
Negative Impact on Your Credit Score
• If the account has a high balance or high interest charges, it could negatively affect your credit score. High balances indicate that you are taking on too much debt, which is a sign of financial instability and can lower your credit score.
• If the primary user on the account has a history of making late payments or missing payments, this too could hurt your credit score as the late/missed payments would be reflected on your credit report.
• If the primary user is using their account to make excessive purchases or has a low credit limit, this could affect your credit utilization rate, which, in turn, will impact your credit score.
Overall Benefits
In general though, being an authorized user on someone else’s account can help you to build your credit score. Responsible credit activity associated with the account will be reflected on your credit report, thus improving your overall credit score. Additionally, if the primary user makes timely payments, it can also help to improve your credit score.
How to Become an Authorized User
Becoming an authorized user is fairly simple. All you need to do is contact the credit card issuer and request to be added to the existing account. The primary user on the account will then have to provide their personal information and agree to add you as an authorized user. Once the request is approved, you will be officially added as an authorized user on the account.
Do You Have to be Related to the Primary User?
No, you don’t have to be related to the primary user in order to become an authorized user. Anybody can add someone else as an authorized user on their account, provided the primary user is willing and able to do so.
Things to Consider Before Becoming an Authorized User
• Make sure the primary user on the account pays all their credit card bills on time and in full each month.
• Make sure there is a good credit limit to the account so you can benefit from the increased credit utilization rate.
• Make sure the primary user has a history of responsible credit usage.
• Make sure the account does not have a high balance or high interest charges.
• Make sure you understand the terms and conditions associated with the account before becoming an authorized user.
Being an authorized user on someone’s credit card account can have a positive or negative effect on your credit score depending on the severity of credit activity associated with the account. Overall, it can help you to boost your credit score so long as the primary user is responsible with their account and the account has a good credit limit. While it may not always be the best option, it can make all the difference when it comes to increasing your credit score. So if you are looking for a way to improve your credit, why not consider adding yourself as an authorized user on someone’s account?
