Key takeaways
- An authorized user can use someone else’s credit card account but usually isn’t responsible for the debt.
- Card companies usually report authorized users to the credit bureaus, which can help build credit.
- If the account holder pays late or runs a high balance, it can hurt your credit too.
- Being an authorized user is different from being a joint account holder or co-signer.
- You can ask to be removed if the account starts hurting your credit.
If you’re starting out or rebuilding credit, someone you trust might offer to add you to their credit card as an authorized user. It can be a simple way to build credit history. But it works both ways: their habits can help or hurt your credit. Here’s what to know.
How it works
An authorized user is someone the account holder adds to their credit card account. The authorized user usually gets their own card and can make purchases. The account holder is responsible for paying the bill.
Who is responsible for the debt?
According to the CFPB, an authorized user generally isn’t responsible for repaying the account’s debt, unless they also agreed to be a joint account holder or co-signer. Check the card’s terms to be sure.
That’s the key difference:
| Authorized user | Joint account holder or co-signer | |
|---|---|---|
| Can use the card | Yes | Yes |
| Responsible for the debt | Usually not | Yes |
| Account usually appears on your credit report | Yes, in many cases | Yes |
How it can help your credit
Card companies usually report authorized users to the credit bureaus. CFPB research on becoming credit visible found that a meaningful share of people first got a credit record by becoming an authorized user on someone else’s account.
If the account has a long history, on-time payments and a low balance, it may help your:
- Payment history.
- Credit utilization, since the card’s limit counts toward your available credit. See what is credit utilization.
- Length of credit history.
Some scoring models and lenders may give authorized user accounts less weight, so the effect varies.
How it can hurt your credit
If the account holder:
- Pays late, those late payments may show up on your report.
- Runs a high balance, your utilization may look high.
- Defaults, the negative history may affect you.
So only become an authorized user on an account managed by someone with a strong, steady payment record.
Before you’re added
- Ask the card company whether it reports authorized users to all three credit bureaus.
- Talk about expectations: whether you’ll use the card, how much, and how you’ll pay them back.
- Make sure you’re not signing up as a joint account holder by mistake.
If it starts hurting your credit
The account holder can remove you, or you can usually ask the card company to remove you. Once removed, the account may no longer appear on your report, though how quickly varies. Check your reports at AnnualCreditReport.com afterward. See how to read your credit report.
Other ways to build credit
If being an authorized user isn’t an option, consider a secured credit card or a credit builder loan. See how to rebuild credit after debt problems.
The bottom line
Becoming an authorized user can help you build credit on the strength of someone else’s good habits, and you’re usually not on the hook for the debt. But their late payments or high balances can hurt you too. Choose the account carefully, confirm it’s reported, and keep an eye on your reports. For what scores mean, see what is a good credit score.
Sources: CFPB: authorized users and liability · CFPB: becoming credit visible · CFPB: ways to start or rebuild a good credit history