Should I Be an Authorized User?

Being an authorized user, also known as “piggybacking credit”, is a very popular method used by people to improve their credit scores. But before you do this, you should understand the risks and rewards. This method can affect your credit for better or for worse.

Here are some of the ways being an authorized user can impact your credit score:

  • Being an authorized user means the accounts will appear on your credit report. Even though they are not your accounts, credit bureaus treat these cards as if they are your own. Make sure you ask to be an authorized user with someone you trust.
  • This setup can make you look bad. All the actions of the primary account holder do gets reflected as your actions. If they miss a payment on their credit card, that means you miss a payment too.
  • Different scoring models treats authorized users differently. Some models only include the positive information from authorized user accounts, while others include both positive and negative marks. Different models are designed in an attempt to isolate out users who are trying to game the system. Just because you become an authorized user doesn’t mean your score will be boosted.

It is very common for parents to put their children as authorized users to help their children build their credit history. If your parents have established a strong and positive credit history, they are a good place to start. Don’t just ask anyone or use a service that connects you with anonymous strangers, there is a good chance this will backfire if you don’t know the primary account holder’s financial background.

It is always a good practice to contact your bank to find out what information they report to the bureaus before you consider your options. If you change your mind later, you can just ask the bank to remove you from the card and stop reporting it. If they refuse to, you can file a dispute with the credit bureaus.