Building or improving your credit can feel like an uphill battle, especially if you’re hesitant to open a new credit card or take out a loan. But what if there was a way to boost your credit score without taking on new debt? That’s where becoming an authorized user comes in. This strategy allows you to benefit from someone else’s positive credit history, giving your own credit profile a well-needed lift.
What Does It Mean to Be an Authorized User?
When someone adds you as an authorized user to their credit card account, you’re given permission to use the card, but you’re not responsible for making payments. More importantly, the account’s history—including on-time payments, credit limit, and account age—gets added to your credit report. If the primary cardholder has good credit habits, this can work wonders for your own credit score.
Key Benefits of Authorized User Status
✅ Improves Payment History: Payment history makes up 35% of your credit score. If the primary cardholder always pays on time, this positive record will reflect on your credit report.
✅ Lowers Credit Utilization: Credit utilization (how much of your available credit you’re using) is another important factor in your credit score. Being added to an account with a high limit and low balance can improve this ratio.
✅ Extends Credit History: A longer credit history helps increase your score. If you’re added to an older account, your credit age will improve, which is especially beneficial if you’re new to credit.
✅ No Hard Inquiry: Unlike applying for a new credit card, becoming an authorized user won’t require a credit check, which means no temporary dips in your score.
How to Choose the Right Account
Not all credit card accounts will help you build credit. Here’s what to look for before getting added as an authorized user:
- Positive Payment History: The primary cardholder should have a history of on-time payments.
- Low Credit Utilization: Ideally, the card’s balance should be well below the credit limit.
- Old Account Age: The longer the account has been open, the better.
- Card Issuer Reports to All Three Credit Bureaus: Not all credit card companies report authorized users’ activity. Confirm that the issuer reports to Experian, Equifax, and TransUnion before proceeding.
📌 Pro Tip: You can check if the issuer reports authorized user activity by calling their customer service or checking their website.
Potential Risks to Consider
While this strategy can be a great way to build credit, there are some risks to be aware of:
❌ Negative Activity Can Hurt Your Credit: If the primary cardholder misses payments or maxes out their card, it could hurt your credit instead of helping it.
❌ Relationship Strains: Money and relationships don’t always mix well. Be sure to have a clear agreement with the primary cardholder to avoid misunderstandings.
❌ Not Every Issuer Reports Authorized Users: Some banks don’t report authorized user activity to credit bureaus, making this method ineffective.
Alternative Credit-Building Strategies
If becoming an authorized user isn’t an option, don’t worry! There are other ways to establish credit responsibly:
- Get a Secured Credit Card – These require a refundable security deposit and work just like regular credit cards. Check out our best secured credit cards guide for recommendations.
- Credit-Builder Loans – Offered by banks and credit unions, these loans are designed specifically to help people build credit. Learn more about credit-builder loans here.
- Report Rent & Utility Payments – Some services allow you to have your rent and utility payments reported to credit bureaus. See how to report rent payments.
- Use Experian Boost – This free tool allows you to add utility and streaming service payments to your credit file to improve your score. Check out Experian Boost.
How to Get Started as an Authorized User
- Find a Trusted Primary Cardholder – Ask a family member or close friend with good credit if they’re willing to add you as an authorized user.
- Ensure the Card Issuer Reports Authorized Users – Not all credit card issuers report authorized user activity. Double-check before proceeding.
- Confirm Payment Habits & Credit Utilization – Make sure the primary cardholder has a strong history of paying on time and keeping balances low.
- Monitor Your Credit Report – Use free credit monitoring services to track your progress. Sign up for free credit monitoring.
- Plan Your Next Steps – Once your credit improves, consider applying for your own credit card or a credit-builder loan to continue building your credit independently.
Final Thoughts
Becoming an authorized user is one of the easiest ways to build credit without taking on new debt. However, it’s essential to choose the right account and maintain clear communication with the primary cardholder. Remember, credit-building is a marathon, not a sprint. By using this strategy alongside other responsible financial habits, you’ll be well on your way to achieving a strong and healthy credit score.
Ready to boost your credit? Explore more credit-building strategies and get expert financial tips on Our Blog.
