Credit Scores authorized user

Published on February 19th, 2014 | by William Charles

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How Does Being An Authorized User Affect Your Credit?

People often have a lot of questions about how authorized users affect credit scores and credit reports. We decided to answer some of the most common questions out there. 

If I add somebody as an authorized user to my card, will their credit be affected?

Authorized users are only supposed to be reported to credit bureaus (and thus affect credit) if they are your spouse, this is because a few years ago somebody had the bright idea of offering a service where they add you as an authorized user to help increase your credit score.

Authorized user your spouse and card not showing on their credit report?

If the authorized user is your spouse and the credit card issuer is not reporting this information to the credit bureau then call the card issuer first to inform them the authorized user is your spouse. This should get it added to their credit report. If it’s still not added, call the credit bureaus as well.

That being said, it is possible to make an authorized user appear as a spouse and thus get it to show on their credit report. To do so the primary card holder and authorized user should:

  • Have the same surname
  • Live at the same address
  • Be of opposite sexes
Equifax is the most aggressive when it comes to removing non-spousal accounts.

Equifax is known for removing authorized user data when they believe the authorized user is not the spouse of the primary card holder.

Which Banks Report Non-Spousal Authorized Users To Credit Bureaus?

Somebody banks will report non-spousal authorized user accounts to the credit bureau, below is a list of banks who do so:

  • BofA
  • Barclays
  • CapOne
  • Chase
  • Citi (reports to all three credit bureaus)
  • Credit One
  • Discover (reports to all three credit bureaus)
  • Firestone (you must call and request the form to fill out)
  • GECRB
  • Macy’s
  • NFCU
  • Walmart (GECRB)
  • WFNNB
  • Zales

Which Banks Don’t Report Non-Spousal Authorized Users To The Credit Bureaus?

  • Amazon.com
  • HSBC (Before CapOne takeover)
  • Jared
  • Kays
  • Lexus
  • RBS
  • UMB

[Neither of these lists contain American Express, that's because American Express &  authorized users are much more complicated. We will be adding a dedicated post about this in the next week or two]

If I Add Somebody As An Authorized User, Will Their Score Go Up?

If you have a good credit history on that card (pay the credit card statement on time, have a low credit utilization and it’s an old card) then it will be beneficial. The opposite is also true though, if you have bad history (never pay on time, have a high credit utilization ratio and it’s a new card) then it will be detrimental to their credit. If you’re unable to be somebody and have them count as an authorized user, then it’s best for them to get a secured credit card to help build their credit history. This is true for the FICO score only, vantageScore doesn’t include authorized user data in their scoring process.

If I am removed as an authorized user, what will happen?

When you are removed as an authorized from an account, the card issuer should notify the credit bureaus and the bureaus should remove all data relating to this account from your credit report. If they fail to do so, you can file a dispute to have these removed.

Does being an authorized user affect your ability to earn a credit card sign up bonus?

No, if you’re added as an authorized user you can still apply for the same card yourself and receive the sign up bonus. For example, the chase sapphire preferred currently gives you 5,000 additional points when you add an authorized user. You could add your wife as an authorized user and then she could sign up for her own chase sapphire preferred and still receive the 40,000 points when she spends $3,000. On the other hand, if you add somebody as a joint user they will not be able to receive the sign up bonus again.

Am I responsible for the main card holders debts if I am added as an authorized user?

No, you’d only be liable for that debt if you were made a joint-owner or co-signed for the credit card. On the other hand the primary card holder is responsible for all of the debt that an authorized user accrues. This is why it’s extremely important to only make people you trust completely an authorized user (e.g spouses). If you wouldn’t loan them the credit limit of the card, you shouldn’t be adding them as an authorized user.

Does being added as an authorized cause a hard inquiry on your credit report?

No, being added as an authorized user will not allow the lender to do a hard inquiry on your credit report. This is because the account holder is responsible for the debt that an authorized user generates.

Do I get all the benefits of the card if I am added as an authorized user (e.g free baggage, insurance etc?)

Usually the more premium benefits such as free baggage don’t transfer to authorized users, whilst items like insurance will transfer. As always check the product disclosure as this varies a lot card to card.

 

Other Advantages Of Adding Authorized Users

  • To take advantage of American Express offers such as: small business Saturday, sync offers and twitter offers allow every card holder to take part (once per card) this includes authorized users. This means you can take advantage of such offers more times than you normally would be able to.
  • You can manage somebody elses credit cards for them. My mom isn’t particularly interested in credit card sign up bonuses, despite seeing the rewards first hand. Now she just applies for the cards, adds me as an authorized user and I do the rest. I could’ve done something similar with other family members, but they prefer to manage it themselves.

This page was last updated on 18th, February, 2014. It’s next due to be updated on 18th, August, 2014.

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9 Responses to How Does Being An Authorized User Affect Your Credit?

  1. Bryan Hall says:

    Why would the spouse need to be the same sex? I am on my husbands accounts and have no issues. I also don’t agree you need to be at the same address seeing I was on my parents accounts that live out of state when I was in college. Just thought you should know .

  2. tangram says:

    I recently added my husband as an authorized user to my credit card, but on talking to the customer service rep at BofA afterwards, I was informed that they do NOT report any AUs (not even spousal as in my case) to the bureaus. This also matches what a banker told us at the brannch. We are yet to even receive the card for my husband so we haven’t been able to directly check his report to see if this account does show up, but so far the info I have is at odds with what you have posted. Is it a law or just suggested practice for lenders to report spousal AUs?

    • ClemK says:

      Did you hear anything else? My grandmother added me as an AU. And when we call the credit card company they said that it should report to the credit bureaus. However when we talked to the bank rep at our local branch she said it wouldn’t. She also stated that they report to the credit bureaus quaterly.

  3. Kevin says:

    Authorized Users should be illegal and this article is incorrect.

    Being added as an authorized user is equivalent to a hard inquiry! All you need is a name and address to add a person onto your account and affect their credit score. I was added as an “authorized user” onto a good standing account with 10% credit utilization only to find out it dropped my credit by 12 pts as it showed I had opened a new account. This was without me signing anything or giving out my SS#.

    So what’s stopping me from getting random peoples names/addresses and adding them onto any of my accounts? NOTHING.

    An enemy can add you onto a bad account and drop your credit score easily without you knowing until saw a credit report. Oh, and good luck trying to prove your innocence to the credit bureaus.

  4. SavingsChris says:

    Took advantage of the authorized user bonus with my wife’s Sapphire Preferred earlier in the month. Hard inquiry was added to my credit report – good thing I manage the cards!

  5. LWT says:

    So what are the rules regarding authorized users and American Express? I’d like to add my in-laws as authorized users to one of my Amex cards to improve their credit scores.

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