What is an authorized user on a credit card?

Trying to build credit can feel like a catch-22. You usually need to open up a credit card or take out a loan in order to start building up your credit scores, but you often can’t qualify for one without a score already in place. 

So, where do you start? 

One of the best ways to get around this is to become an authorized user (AU) on someone else’s credit card. As an AU, you benefit from the cardholder’s history with the card, including their on-time payments. Just be careful who you ask to add you as an AU, because their credit missteps can potentially backfire and harm your scores. 

What is an authorized user on a credit card?

An authorized user is someone whose name is added to a credit card account after the account is opened. 

Unlike a primary credit cardholder or a joint account holder, the AU’s credit history is not a factor in qualifying for a credit card. To become an AU, you can simply have someone reach out to their creditor to add your name to their account, with no new application or credit check required.

Why would you become an authorized user? Because it’s one of the easiest ways to establish credit. When someone adds you to their account as an AU, their account information will show up on your credit reports and be factored into your scores. In other words, you benefit from their history with the card. 

	Primary account holder	Authorized user
Do you need to submit an application?	Yes	No
Are you automatically issued a card?	Yes	No
Can you use the credit card account?	Yes	Yes
Can you access the account statements?	Yes	Maybe
Are you responsible for payments?	Yes	No
Do missed payments hurt your credit?	Yes	Yes
Can you be removed from the account?	No	Yes

How to add or become an authorized user

Adding an additional cardholder to a credit card is relatively easy to do. As the primary cardholder, you can add anyone you want, so long as the creditor allows additional cardholders (most creditors do) and the AU meets the minimum age requirement. Here’s how it’s typically done:

1. Most credit companies will allow you to add an additional cardholder online, Contact the creditor online, or you can call the customer service number on the back of the card. 
2. Provide the requested information for the authorized user. This may include: 
   • Name
   • Phone number
   • Date of birth
   • Address
   • Social Security number 
3. If applicable, pay the creditor’s fee for adding an authorized user.
4. Depending on the card, you may have the option to set a spending limit for the authorized user.
5. Some companies will automatically ship a card for your new cardholder, or you may need to request a credit card with the authorized user’s name.

How to remove an authorized user

Just like adding an authorized user, removing an additional cardholder from your credit card is easy to do. Depending on the creditor, you can usually do this with a simple call or by logging into your account. Some creditors also allow authorized users to request their own removal. 

Impact on Credit Scores

When someone adds you as a new user to their credit card account, you get to benefit from their positive account history. That’s because the history will show up on your credit reports, and it will be used to calculate your credit scores. 

This includes the following categories of information that are weighed into credit score calculations:

• Payment history
• Credit utilization
• Length of credit history

Of course, it’s important to keep in mind that this can backfire. If the primary cardholder has problems with the account — such as missed payments or a high balance — that negative information will show up on your credit reports and can hurt your scores.

Pros and Cons

Becoming an authorized user can really help you jump-start your credit. But before you ask someone to add you as an additional cardholder, make sure you consider all of the benefits and drawbacks. Here’s an overview.

Pros

• One of the few ways to build credit from scratch
• You don’t need good credit to become an authorized user
• It’s easy to add an authorized user to a credit card
• The authorized user is not responsible for the credit card payments
• Adding an authorized user does not affect the primary cardholder’s credit
• If the primary cardholder misses a payment, the authorized user can request to be removed from the account and have the card removed from their credit reports. 

Cons

• Missed payments can do damage to the authorized user’s credit scores
• The authorized user’s credit scores can decrease if the card balance goes up
• Being an authorized user has less impact on some versions of your credit scores than being a primary cardholder.
• Some creditors charge an annual fee for authorized users

A Financial Head Start: Building Your Child’s Credit Early

Many parents wait until their children are heading off to college to think about credit, but by then, the uphill battle of needing credit to get credit has already begun. Since most major issuers allow you to add an authorized user as young as 13 or 15 (or have no age limit at all), adding your child as an authorized user is one of the most powerful ways to teach children money skills and set them up for future success.

You can use the card as a teaching tool. Give them a card with a small, set spending limit to use for gas or groceries, then review the account statements together each month to explain how interest and grace periods work. If you’re worried about your teen overspending, you can add them as an additional cardholder to build their score but never actually give them the card. Their credit report will still reflect your good habits, giving them the “boost” they need later on.

Tips for Success: Setting Expectations

Are you thinking about asking someone to make you an authorized user? If so, it’s important to do a little prep work to find someone who has good credit scores, and have a thoughtful conversation with them up front. 

It helps to create a brief “Relationship Agreement” checklist to make the conversation less awkward:

• Determine the “Why”: Is this for a short-term boost or long-term education?
• Set the Spending Limit: Do you plan to actually use the card? If so, what is the monthly cap?
• Account management: Some credit card companies allow additional users to have their own online account access so they can monitor their transactions for fraud, make payments, or take advantage of other card perks. Decide if the AU should set this up, if available. 
• Talk about payments: Will the authorized user be expected to pay back what they’ve spent? If so, should they make their payments to the credit card company, or reimburse the primary cardholder directly? Should they do this after every purchase or by the card’s due date each month? Agree on a plan that works for you before the AU starts making purchases. 
• Plan the Exit: How long will you stay on the account? (e.g., “Until my score hits 700” or “Until I can get my first solo card”). This keeps the arrangement from feeling like a permanent burden to the primary cardholder.

When approaching a loved one about adding you as an authorized user, you might say something like this:

I’m working on improving my credit and getting my finances in order, and I’m wondering if you would be willing to help. If you add me to one or more of your credit cards as an authorized user, your account information will appear on my credit reports and it can help my scores grow. I don’t need a copy of the credit card or any access to the account at all. Would you be willing to help me out with this?

Then, before letting someone add you as an AU, make sure they have at least one credit card with a positive history. You may even want to visit AnnualCreditReport.com with them to pull each of your credit reports (it’s free) and review them together. 

When examining the primary cardholder’s history with the account, here’s what you should prioritize:

• Credit reporting: Not all credit card issuers report AU data to all three bureaus. Have the primary cardholder check with their issuer and ask if they report authorized user activity to all three credit bureaus.
• Past payments: Look for a card with no missed payments in the past seven years. If that’s not an option, choose a card that hasn’t had a recent missed payment.
• Balance: The best card will have a low balance and a high limit. Avoid being added to any card that’s near being maxed out.
• Length of history: The longer the account has been open, the better.  

Bad credit isn’t a life sentence

When it comes to building up your credit, it can be difficult to get started. Fortunately, some people have the option to get help from a loved one by becoming an authorized user. There aren’t many quick and easy ways to improve your credit, but becoming an AU is one of them.

If becoming an authorized user isn’t an option for you, don’t give up on having good credit! There are other ways to build your credit scores — including by using a secured credit card or a credit-builder loan  —  it just takes a bit more effort to get started.