Being an authorized user means someone with a credit card adds you to their credit card account, giving you authorization to use it.
As an authorized user, you can receive a credit card tied to the account and can make purchases and use the card as if it were your own. There’s usually no credit check involved to become an authorized user and paying the credit card bill will still be the primary account holder’s responsibility.
An authorized user isn’t likely to be able to make changes to the account like requesting a credit increase or adding more authorized users. Also the primary cardholder can remove the authorized user from the account.
How can being an authorized user affect your credit?
If the card issuer for the accounts you’re an authorized user on report to the three major consumer credit bureaus, the accounts can appear on your credit reports. If the original account holder has good credit and good credit habits, being added their account could help you build credit, especially if if you have a less than ideal credit or no credit.
If the account shows up on your credit reports, the primary account holder’s actions can impact your credit for better or for worse.
- If the primary account holder has a good credit history, such as on-time payments, and a low credit utilization rate, this could have a positive impact on your credit.
- On the other hand, if the primary account holder misses a payment on the card, or has a high credit utilization, the authorized user’s credit can be negatively affected.
What about becoming a joint account holder?
Some credit card issuers may give you the option of opening a joint credit card. With a joint account, both parties are legally responsible to make payments. Joint accounts can be helpful for partners or spouses who share checking or savings accounts.
The process of being added as a joint account holder to an account is stricter than being an authorized user. Lenders will expect you to meet certain credit requirements, similar to if you were applying for a credit card on your own.