If you have poor credit, it may be difficult for you to get a credit card in your name. However, if you have a friend or relative who trusts you and who has good credit, he can list you as an authorized user on his credit account. As an authorized user, you have your own card and the same rights to make purchases. The credit card company may or may not report positive information about you every 30 days when the primary cardholder pays his bill. It should not report negative information about you if he defaults.
Timeframe Depends on Lender
Some creditors do not report authorized users on credit cards to the credit card bureaus. This practice helps stop fraudsters from paying a person with good credit to authorize them as users for the sole purpose of raising their credit scores due to the primary cardholder's good payment history. If a creditor does report authorized users to the credit bureaus, it does so every 30 days when it reports whether the primary cardholder has paid his bill on time.
In most cases, the authorized user's credit is not affected if the primary cardholder defaults on the credit card. The primary cardholder is considered solely responsible for the debt; thus, the creditor will report her if she does not pay the debt as agreed, not the authorized users. Some creditors report authorized users anyway in the hopes that they will pay the debt, but this practice is illegal.
Since the primary cardholder is liable for any credit card use, he has little recourse if the authorized user abuses credit. The abuse will not show on the authorized user's credit report, and the primary cardholder's credit may be affected. Thus, many primary cardholders ask authorized users to sign a written agreement stating they will not use more than a certain amount of credit or only use the card for certain purchases. This agreement supports the primary cardholder should he have to sue the authorized user to recover funds.
What to Do
If an authorized user discovers that delinquencies have been reported on her credit instead of on the primary cardholder's, she should dispute the debt in writing. Send a letter to the credit grantor as well as the credit bureau that reported the information. In the letter, inform the creditor that you are an authorized user and not financially responsible for the debt. If the creditor will not remove the negative information, contact an attorney.
- Transunion: Authorized User Abuse: Identify and Manage the Risks Associated with Credit Boosting; Keith Carson and Ezra Becker; 2007
- Experian. "Authorized User vs. Joint Account Holder: What’s the Difference?" Accessed March 3, 2020.
- Experian. "Authorized User vs. Cosigner." Accessed March 3, 2020.
- Experian. "Will Being an Authorized User Help My Credit?" Accessed March 3, 2020.
- FICO. "Fair Isaac Innovation Will Restore Authorized User Accounts to Calculation of FICO 08 Scores." Accessed March 3, 2020.
Jack Ori has been a writer since 2009. He has worked with clients in the legal, financial and nonprofit industries, as well as contributed self-help articles to various publications.