What It Means
An authorized user is someone who has been granted permission to use another person's credit card account. The primary cardholder remains fully responsible for all charges. Becoming an authorized user is a popular credit-building strategy because the account's payment history typically appears on the authorized user's credit report. This can help someone with limited or no credit history establish a positive credit profile. However, if the primary cardholder misses payments or carries high balances, it can negatively impact the authorized user's credit as well. Most major credit card issuers report authorized user accounts to the credit bureaus.
Frequently Asked Questions
Does being an authorized user build credit?
Yes, in most cases. When added as an authorized user, the account history typically reports to your credit file, helping you build credit. However, this only helps if the primary cardholder maintains good payment habits and low utilization.
Can an authorized user hurt my credit?
As a primary cardholder, the authorized user's spending can increase your utilization ratio. As an authorized user yourself, you can be negatively affected if the primary cardholder misses payments.