Authorized User, Does It Improve Your Credit

Good credit is important when applying for loans or even obtaining a place to live. Employers are starting to check employee’s credit history. If you have bad credit, there usually isn’t a lot you can do to fix it quickly. It takes time. Therefore, it pays to open lines of credit early and always make your payments on time. This can take years. You may be wondering if there is anything that can be done to boost your credit quickly. If you’ve ever activated a new card, you’re often asked if you’d like to add anyone as an authorized user.

Boosting Your Credit as an Authorized User

authorized userEvery time a new card is opened your score will take a hit. This affects the average age and inquiries. Since you’re introducing a new credit card, this will affect and lower the age of all your cards. Credit issuers do not like to see too many inquiries on your report. Your score will bounce back by adding a new account and increasing your overall credit limit. However, that is not enough to offset your bad credit.

Being added as an authorized user is just like applying for a new card without the hard inquiry. Some companies will even backdate your card to the original owners ‘member since date’. For example, if you were added to an account that was 10 years old, you would have received the same age. This rarely happens.  As an authorized user, you receive your own credit card that is linked to the main users account. This will allow you to make purchases and payments, but not able to make any significant changes to the account.

It is important to keep in mind there are risks to adding an authorized user. You will be responsible for all charges the user makes. If a user doesn’t pay their bills, your credit is now at risk. To avoid this, you can add a user but not actually give them the card. They will still get the benefits but you won’t take any risk.

Posted in Debt, good credit.