Credit Card FAQ
Will Your Credit Score Improve If You Are An Authorized User On A Credit Card Account?
Many people have frequently asked the question, "Will your credit score improve if you are an authorized user on a credit card account?" Since many people are trying to find ways to improve credit scores quickly, becoming an authorized user seems an easy way to accomplish the score you want quickly.
Determining whether a credit score will improve or be affected at all by becoming an authorized user on a credit card account is an important idea to consider. Indeed, in times past, this was a simple solution to the credit dilemma of not having enough credit or a high enough credit score to have credit extended to you.
Authorized User Defined
Before answering the question, "will your credit score improve if you are an authorized user on a credit card account?" we must first define the term. An authorized user is someone who has access to use a credit card, but does not have any obligation to pay it. The account will show up on the person's credit report and the history reflected will be that of the main account holder. The reason many people add authorized users is because they want someone else to be able to use their card, but are not sure if that person would qualify, and if so, increase their interest rate. An authorized user does not impact the type of credit extended to the main account holder.
Will your credit score improve if you are an authorized user on a credit card account?
There was a time when this was the case. However, due to fraud, the credit reporters started taking the accounts out of their calculation of credit score back in 2007. It used to be easy to get an extremely high credit score by having someone add you as an authorized user to all of their well established and paid on time accounts. But, as all good things come to an end, this is no longer the case. Your score will not be impacted at all if you are only an authorized user.
On the up side, this also means your score won't go down if somebody forgets to make a payment. It used to be very common for meticulous payers to end with a poor credit score through no fault of their own. People had no idea whether the accounts with their names on them were being paid timely and had a difficult time finding out. Most people didn't find out until they were sitting in front of a creditor trying to make a purchase. Since you're not obligated to make the payments, your credit score would not accurately reflect your payment history, so it doesn't make sense to include those accounts in your score.
Is there still a way to improve credit by being added to someone else's account?
There are ways you can increase your score with the help of another person who may be more established. The most common way to do this, is to become the main account holder and ask someone else with a well established credit history to become a cosigner for you. This will mean you are both responsible for the repayment of the loan. Both of your credit scores will be affected. This is different than if they were just an authorized user and their credit was unaffected. In this situation, you are both equally responsible. So, before asking someone to do this for you, make sure you plan to be responsible with your credit and make timely payments. Nothing ruins a relationship like destroying somebody's credit because you didn't stick to your end of the bargain.
In short, when asked the question, "Will your credit score improve if you are an authorized user on a credit card account?" you will now know the answer is no. But there are ways to become a joint account holder and reap the positive benefits of making timely payments with the backing of a well established account holder.
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