Building or improving your credit score can feel like a challenging task, but one of the fastest ways to give your score a boost is by becoming an authorized user on someone else’s credit card. This strategy can help establish positive credit history and improve your credit profile without applying for new credit on your own. Here’s how it works and how to make the most of it.
What Is an Authorized User?
An authorized user is someone who is added to another person’s credit card account. While the primary cardholder remains responsible for making payments, the authorized user gets the benefit of the account’s history and positive activity being reported to their credit report.
How Becoming an Authorized User Helps Your Credit Score
- Builds Credit History: If the account has a long history of on-time payments, it can help establish or strengthen your credit profile.
- Improves Credit Utilization: A lower utilization rate (credit used vs. available credit) can positively impact your credit score.
- No Hard Inquiry: Unlike applying for a new credit card, becoming an authorized user does not trigger a hard inquiry, which can temporarily lower your credit score.
- Fast Results: Since the account’s history is typically reported to your credit profile soon after being added, you can see improvements in your credit score within a few billing cycles.
Steps to Successfully Use Authorized User Accounts
- Choose the Right Account – Ask to be added to an account with a high credit limit, low balance, and a perfect payment history.
- Verify Reporting Policies – Not all credit card issuers report authorized user activity to credit bureaus, so confirm with the lender before proceeding.
- Monitor Your Credit – Regularly check your credit report to ensure the account is being reported correctly and benefiting your score.
- Communicate with the Primary Cardholder – Ensure they maintain responsible credit habits, as any late payments or high balances can negatively impact your credit.
- Know When to Remove Yourself – If the primary cardholder starts missing payments or carrying high balances, consider removing yourself from the account to avoid damage to your credit.
Is This Strategy Right for You?
Becoming an authorized user is a great option for credit beginners, students, or those rebuilding credit after financial setbacks. However, this method works best when paired with responsible credit management, such as making on-time payments on other credit accounts and keeping balances low.
Final Thoughts
Using authorized user accounts can be a powerful tool for boosting your credit score, but it’s essential to approach it wisely. Always ensure the primary cardholder has good credit habits and keep an eye on your credit report for positive changes. If done correctly, this strategy can put you on the fast track to a higher credit score and better financial opportunities!
Need help improving your credit? Contact us at JDP Credit Solutions for expert guidance!