If you want to build your credit, becoming an authorized user on someone else’s credit card could be a good option. When you become an authorized user on another person’s credit card — whether that person is a spouse, a parent or another close family member — you have the opportunity to benefit from the primary cardholder’s positive credit habits.
That said, the authorized user relationship isn’t designed to last forever.
“Anyone seeking to be an authorized user on someone else’s card needs to have a goal and exit strategy from the onset,” explains Lawrence Delva-Gonzalez, a Treasury Department auditor who shares community-driven financial advice at The Neighborhood Finance Guy.
With that in mind, here’s what you need to know about the authorized user process — including how to get started as an authorized user, when to end the authorized user relationship and how to take the next steps of your credit journey on your own.
How to become an authorized user
First of all, if you’re hoping to become an authorized user on someone else’s credit card, here’s what you need to do:
- Identify a primary cardholder who uses credit responsibly
- Ask if you can become an authorized user on their credit card
- Agree on how to use the shared line of credit
Here’s how to put these steps into action.
Identify a primary cardholder who uses credit responsibly
Many people ask spouses, partners or parents to serve as the primary cardholder. In fact, many parents make their children authorized users on their credit cards as a way to help kids build credit early.
No matter who you ask, it’s important to choose a primary cardholder who can be trusted to use their credit card responsibly.
“Whether the goal is to raise your credit score or have access to credit with preferable terms, you should be looking for a very creditworthy person with a high credit score and a low debt-to-income ratio,” Delva-Gonzalez explains. “This person should be financially stable.”
Ask if you can become an authorized user on their credit card
If you want to become an authorized user on another person’s credit card, be prepared to explain how the authorized user relationship can help you improve your credit score.
Many credit issuers report authorized user accounts to the three major credit bureaus, which means that every time the primary cardholder makes an on-time payment or pays off an outstanding balance, their responsible credit activity becomes part of your credit history as well.
This gives you the opportunity to build the kind of positive credit history that could enable you to get your own credit card within a year or two. Explain that once you have the kind of credit you need to apply for cards on your own, you’ll end the authorized user relationship and remove yourself from their card.
Agree on how to use the shared line of credit
When you talk to your friend or family member about setting up an authorized user account, make sure you discuss how you’re going to use the shared line of credit. In some cases, the primary cardholder may set a limit on how much money you can spend per month. In other cases, you might agree to only use the shared credit card for specific household purchases, such as groceries or gas.
“Both parties need to articulate their intentions from the beginning,” advises Delva-Gonzalez.
Since the primary cardholder is legally responsible for all purchases made on the card, it’s important that they feel comfortable sharing the card with you. It’s also important that you are given enough responsibility and leeway with the line of credit so that you don’t feel as if you are being monitored or judged. If the authorized user relationship gets in the way of your personal relationship — one of the common drawbacks of being an authorized user — it’s time to move on.
When to remove yourself as an authorized user
Once you’re an authorized user on someone’s credit card, you should also start thinking about how long you want to maintain that relationship. There are three big reasons to remove yourself as an authorized user:
- The primary cardholder makes choices that damage their credit — and yours
- You’ve been an authorized user for more than two years
- Your credit is good enough to open a card on your own
Let’s look at each of these reasons in turn.
The primary cardholder makes choices that damage their credit
If your primary cardholder begins practicing bad credit habits — such as missing payments or maxing out credit cards — end your authorized user relationship as quickly as possible.
Some lenders don’t report missed payments on an authorized user’s credit report, since the authorized user is not responsible for making payments on the card. However, a missed credit card payment is often followed by a high credit card balance — and even if you are only the authorized user on the account, that high balance could become a part of your credit history.
“If a primary cardholder runs up a high balance and intends to carry said balance for a long time, it’s likely best to part ways,” says Delva-Gonzalez. Since both your FICO credit score and your VantageScore credit score pay careful attention to your credit utilization ratio, a high credit card balance could hurt your credit.
You’ve been an authorized user for more than two years
Even if your authorized user experience goes well, you should still make a plan for removing yourself as an authorized user, and you might want to put that plan into action fairly quickly. “You don’t need to remain an authorized user for more than one or two years,” says Delva-Gonzalez.
Why should you plan to end your authorized user relationship within a couple of years? Two reasons. First, it encourages you to focus your time as an authorized user. Maintain the account just long enough to learn how to use credit and establish a positive credit history. Then, use your improved credit history to apply for a starter credit card of your own.
Second, many people don’t realize that becoming an authorized user might not help their credit as much as they might hope — especially under the FICO 8 scoring model, which is now the most common credit scoring model used by lenders. “Basically, your credit score can improve but your FICO score can lag behind,” says Delva-Gonzalez.
You’re ready to take control of your own credit journey
In many cases, you can begin applying for your own credit cards as soon as you have six months of positive credit history on your credit reports. While this kind of credit profile might not get you access to the top credit cards on the market, you might find yourself eligible for some of the easier credit cards to get — so go ahead and start applying.
Some people wonder if removing themselves as an authorized user will damage their credit score by lowering their length of credit history. The best way to avoid this problem is by opening your own credit card as quickly as possible — even if you’re currently an authorized user on someone else’s account.
“If you have a credit account that’s six years old and an authorized user account for the same timeframe, the length of your credit history remains the same even if one account gets crossed out,” says Delva-Gonzalez. “However, if you have a credit account that’s two years old and an authorized user account that’s eight years old, removing the authorized user account could hurt your credit score.”
Getting your own credit card after being an authorized user
Once you’re ready to get your own credit card, use a service like Bankrate’s CardMatch™ tool to get personalized credit card recommendations. You may also want to consider one of the following secured credit cards, all of which are excellent credit-building tools:
It’s important to open your own credit card as soon as you can — even if you’re only eligible for a card that requires a security deposit. With a line of credit under your own name, you’ll be able to start making the kinds of responsible credit choices that could lead not only to a good credit score, but also a strong financial future.
The bottom line
Becoming an authorized user on a credit card can help you begin to build your credit. Knowing when to remove yourself as an authorized user can help you take your credit even further. Don’t become an authorized user without an exit strategy, and start applying for your own credit cards as soon as possible. That way, you can end your authorized user relationship without worrying how it will affect the length of your credit history.
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