Authorized User Account Pros and Cons

Becoming an Authorized User

Authorized user accounts are created when a primary account holder on a credit card contacts the creditor and asks them to add a third party, such as you, to the account. When the account is reported on your credit report you will “inherit” the full score benefit of the account and its history just as if the account had always been yours.

Terrific Credit Repair Boost

This can be a terrific boost to your credit repair effort, but it is not a substitute for building your own credit. If you get authorized user accounts you should still get new accounts in your own name. There are two good reasons.

Authorized User Risks

There are potential risks to authorized user accounts. Remember that the account is not yours. This means that you must have a high degree of trust in your donor. If, for any reason they miss a payment, or even if they just run up the balance during the holiday season, your scores will suffer. And if you ask to be removed from the account once things have gone bad the creditor is not likely to oblige.

Lender Requirements

In addition, the authorized user status is marked on your credit report with the letter “A” making the account type quite visible. This is a consideration, as some lenders require that you have accounts in your own name, and authorized accounts will not meet the requirement.