How to Build Credit as an Authorized User

Yes, you can build credit by being an authorized user. But you can also hurt your credit if you or the primary account owner manage the account poorly.

How Being an Authorized User Can Build Your Credit

Being an authorized user means you’re given permission to use someone else’s credit card. When the primary account holder makes timely payments and keeps their balances low, it can help boost your credit score too. It’s like getting a piggyback ride on someone else’s good credit habits! You can build credit without doing anything at all.

How Fast Can You Build Credit as an Authorized User?

It depends. Some credit bureaus might start including this information in your credit report right away, while others might take a few months. But regardless, building credit always takes time. Very rarely – especially if you’re just starting to build credit or you’re recovering from bad credit – will your credit score suddenly jump 100 points overnight.

Remember, your credit score is like a snapshot of your credit history. The longer you have positive credit habits, like making on-time payments and keeping balances low, the better your credit score will become.

How Being (or Adding) an Authorized User Can Hurt Your Credit

If the authorized user or the primary account holder don’t manage the shared account well, if you miss payments or carry high balances for example, it can drag both of your credit scores down. So whether you’re adding an authorized user or becoming an authorized user, make sure it’s someone you trust.

When it comes to shared credit accounts, communication is key. Make sure you’re both on the same page about how the credit card will be used and who is responsible for making payments. Setting spending limits and discussing financial goals can help prevent any negative impact on your credit scores.

Who Can Be an Authorized User?

Almost anyone can be an authorized user. Your credit card issuer will have  their own guidelines around who can be added or the process of adding them to your account, so make sure to check with them.

How Old Do You Need to Be to Be an Authorized User?

There’s no set age, but some credit card companies might require you to be at least 18 years old. Always check with the issuer to be sure.

If you’re under 18, you might still be able to build credit through other means, such as a student credit card or a secured credit card with a co-signer.

Can You Set Spending Limits for an Authorized User?

Yes, some credit card companies allow the primary account holder to set spending limits for authorized users. It can be a helpful way to keep everyone’s spending in check.

Setting spending limits can also provide peace of mind, knowing that the authorized user won’t be able to rack up charges beyond a certain amount.

Does an Authorized User Need to Pay Credit Card Bills?

It’s not typical for the authorized user to be obligated to pay the credit card bill – that responsibility usually falls on the primary account holder. However, like we said before, if the primary account holder doesn’t pay the bill on the account it can hurt the authorized user as well.

As an authorized user, it’s important to use the credit card responsibly and communicate with the primary account holder about any charges you make. Payment history is one of the biggest factors in how your credit score is calculated, so make sure you do whatever you can to protect it. 

Other Ways to Build Credit if You Can’t Be an Authorized User

If becoming an authorized user isn’t an option for you, don’t worry! There are other ways to start building credit:

Secured Credit Card: These cards require a cash deposit that acts as your credit limit. They’re a great way to establish credit if you’re just starting out.

Student Credit Card: Designed for students, these cards often come with lower credit limits and fewer fees, making them a good option for building credit responsibly.

Credit Builder Loan: This type of loan is specifically designed to help people build credit. You borrow a small amount, which is held in a savings account until you’ve paid off the loan.

Check Your Credit For Errors: Sometimes mistakes happen! Regularly check your credit report for errors or inaccuracies that could be dragging your score down.

Building credit might seem intimidating, but with patience, responsibility, and a bit of know-how, you can set yourself up for a strong financial future! Remember, it’s not just about having a high credit score; it’s about building healthy financial habits that will serve you well for years to come.