Benefits Of Adding Yourself As Authorized Credit Card User

Advantage Of Being An Authorized Credit Card User

Being a authorized credit card user can be a great way to establish or re-establish credit.  However, there are risks and rewards in being an authorized credit card user.  We will be discussing the risks and rewards in being an authorized credit card user in the following paragraphs.

Being Authorized Credit Card User Can Boost Your Credit Scores

People with no credit or bad credit can boost their credit scores by being an authorized credit card user on somebody else’s credit card.  Someone with good credit can add you as an authorized user on their credit card account.  One of the rewards of being an authorized user on someone else’s credit card is that the credit reporting agencies will report the main card holder’s credit payments and history to your report.  If the authorized user pays his or her payments on time, it will also reflect it on your credit report and increase your credit scores.  This is a great way of establishing or reestablishing your credit.

Instant Credit Tradelines

Risk and rewards in being an authorized credit card user is that you will definitely see instant postive results when you are added as an authorized user with someone who has a stellar credit history.  The user does not have to give a credit card to the authorized user, thus, eliminating the risk of the card holder having negative credit because the authorized user does not pay the minimum payment.

As an authorized user, you will not get any monthly bills.  All monthly bills will go to the card holder including credit cards.  The main card holder can decide whether to give the authorized user a card to use or can just shred it.  The main card holder can cut off the authorized user at any time.

Negatives Of Being An Authorized Credit Card User

Other risks and rewards in being an authorized credit card user is that there are liabilities.   If the main card holder misses a payment or gets into financial trouble, it will affect the authorized user.  I have one mortgage loan client whose credit score is 607 because of the effects of the authorized user card.  The main card holder has good payment history but has a credit card balance of $3,500 on a $3,000 maximum limit credit card.  This is hurting the credit score so I suggested the authorized user to have the main card holder to cut him off.  He did that and his scores improve to over 645 FICO the next credit reporting period.

Fastest Way Of Rebuilding Your Credit

There are many risks and rewards in being an authorized credit card user to establish or reestablish credit.  However, using the authorized credit card strategy in building credit and improving credit scores should be on a temporary basis until the authorized credit card holder has established credit on their own.

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