What Is an Authorized User on a Credit Card?

Highlights:

• Becoming an authorized user on someone's credit card account is one way to build a credit history.
• A credit card authorized user can make purchases with the credit card as if it were their own. But the responsibility to pay any charges remains with the primary cardholder.
• Being an authorized user can help your credit, but removing yourself from the account can hurt it.

It is important to have a strong credit history. You need credit to get a loan, buy a car, or even rent an apartment. But it can be tricky to build credit when you have little to no experience using credit. One way to build credit is to become an authorized user on another person's credit card account.

What is an authorized user and how does being an authorized user affect your credit?

An authorized user is a person added to a credit card account by the card's owner, the primary cardholder. The authorized user can make purchases with the credit card as if it were their own. But the responsibility to pay any charges remains with the primary cardholder.

Authorized user accounts may be in your credit reports and can help you improve or build your credit. It's important that the primary cardholder has a history of responsible credit behavior. This may include on-time payments and a low level of debt compared to available credit. When this happens, the account could also improve your credit score. The opposite is also true if the primary cardholder has a history of missed payments. When this happens, your credit is unlikely to improve from the account.

A card issuer may alert the nationwide credit reporting agencies (NCRAs) of authorized user accounts. Equifax^®, Experian^®, and TransUnion^® must know of the account for it to be on your credit report. If the card issuer does not report the activity, being an authorized user will have no effect on your credit. Contact the card issuer before becoming an authorized user. You need to confirm if they will report the authorized user account.

What responsibilities does an authorized user have?

Authorized users have no legal duty to pay for charges to the credit account. The primary cardholder is the one responsible for making payments. However, that doesn't mean an authorized user should spend without limit. The authorized user needs to track their spending. Be sure to pay the primary cardholder for their purchases. If you want to become an authorized user to build or improve your credit, you may not even need a credit card.

How to add or become an authorized user

Authorized users are often related to the primary cardholder. They might be a child, another family member or even a close friend. But anybody can become an authorized user. If you want to become an authorized user, speak with a trusted friend or relative about the process. The primary cardholder then must allow the credit card company to add you to their account. They can do so by telephone with the card issuer, or online through the bank's mobile app or website. There may be a fee for adding an authorized user, depending on the credit card provider. Once approved, you will have the option of having a new credit card issued in your name. Keep in mind that you are not required to request or receive a credit card as an authorized user. Being on the account can impact your credit history with positive financial habits.

How to remove an authorized user

In some cases, authorized users can remove themselves from an account. All they have to do is contact the card issuer. Otherwise, the responsibility to remove an authorized user falls on the primary cardholder. They must get in touch with the financial institution to have an authorized user removed. For many, becoming an authorized user can help your credit. But it is important to remember that your removal from the account could also impact you. This is common if you have little credit history outside of the authorized user account.

Keep track of your credit as an authorized user

If you are an authorized user on someone else's account, take this time to form positive credit habits. Be sure to track your spending and work out a payment plan with the primary account holder. Any missed or late payments will show up on both the primary cardholder's and your credit history. So, it's important to make smart spending decisions.

Be sure to keep a careful eye on your credit reports and credit scores throughout the process. Track your credit and note any changes that come with being an authorized user. You can receive multiple Equifax credit reports with a free myEquifax™ account. Sign up and look for "Equifax Credit Report" on your myEquifax dashboard. You can also get free credit reports from the three nationwide consumer reporting agencies (Equifax, TransUnion and Experian) at AnnualCreditReport.com.