What Happens to Your Credit When You're an Authorized User?
Becoming an authorized user on someone else's credit card is a powerful and accessible way to begin building credit, especially for those with little to no credit history. It allows you to leverage another person's good financial habits to build your own credit profile. However, this strategy is not without its risks and requires trust and clear communication. Understanding how it works is key to making it a successful part of your credit-building plan.
For a comprehensive overview of the credit-building process and other strategies, read our guide, A Complete Guide to Building and Rebuilding Credit with a Credit Card.
How authorized user status works
When you are added as an authorized user, the primary cardholder essentially gives you permission to use their credit account. While the account remains the primary holder's responsibility, the card issuer reports the account's history to the credit bureaus under both your name and the primary cardholder's.Key factors for success as an authorized user
To make this strategy work for you, you must be deliberate in your approach.The benefits of becoming an authorized user
When done correctly, becoming an authorized user can provide significant benefits.The risks of becoming an authorized user
While the benefits are significant, it is crucial to be aware of the risks.How to use authorized user status in your overall strategy
Becoming an authorized user is often best used as a temporary or supplementary tool for building credit.Related credit card articles
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Experian Boost: A Comprehensive Guide to Boosting Your Free Credit Score
FICO® Credit Scores
FICO® Score Ranges:
- Exceptional: 800–850
- Very Good: 740–799
- Good: 670–739
- Fair: 580–669
- Poor: 300–579
What is a Credit Score?
A credit score is a three-digit number, typically ranging from 300 to 850, that predicts your creditworthiness—how likely you are to repay borrowed money on time. Lenders use this score to assess the risk of lending to you and to determine the interest rates and terms of any credit you might receive.
Why is a Credit Score Important?
A credit score is important because it acts as your financial reputation. Lenders, landlords, insurers, and employers use this single number to quickly judge how reliable you are with money. A higher score helps you qualify for loans and credit cards, often securing lower interest rates that can save you significant money. Conversely, a poor credit score can lead to application denials or much higher costs for borrowing, making it a key factor in your overall financial opportunities.
FICO® Credit Score Facts
- Three-Digit Number: Like other credit scores, FICO® Scores are a three-digit number that summarizes a consumer's credit risk.
- Range: Most standard FICO® Scores range from 300 to 850. Higher scores indicate lower credit risk.
- Data Source: FICO® Scores are calculated using data from your credit reports maintained by the three major credit bureaus: Experian, Equifax, and TransUnion. Your score may vary slightly depending on which bureau's data is used.
- Industry Standard: Lenders rely on FICO® Scores for mortgages, auto loans, and credit cards because they provide a consistent, statistically sound assessment of the likelihood that a borrower will repay their debt.
Note: Credit scores are used to represent the creditworthiness of a person and may be one indicator to the credit type you are eligible for. However, credit score alone does not guarantee or imply approval for any credit card product.
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