Authorized User
What an authorized user is on a credit card, how it affects credit scores for both the primary cardholder and the authorized user, and when adding one makes sense.
What Is an Authorized User?
An authorized user is a person added to someone else's credit card account who has permission to use the card but is not legally responsible for paying the balance. The primary cardholder is responsible for all charges, including those made by the authorized user.
Most card issuers allow you to add authorized users at no charge or a small annual fee per user. You can typically add a spouse, child, parent, or anyone you choose.
How It Affects Credit Scores
When you are added as an authorized user on an account, that account's full history may appear on your credit report, depending on whether the card issuer reports authorized user activity to credit bureaus. Most major issuers (Chase, Amex, Citi, Capital One, Discover) report authorized user accounts to the major bureaus.
For the authorized user: If the primary account has a long, clean history and low utilization, being added as an authorized user can significantly improve your credit score, sometimes by 20 to 50 points. This is why being added to a parent's established card account is one of the fastest ways for a young person to start building credit.
For the primary cardholder: Adding an authorized user does not directly affect your score. The account history and payment behavior were already on your report. The only risk is if the authorized user makes charges that push your balance higher and raise your utilization ratio.
When Adding an Authorized User Makes Sense
For credit building: Parents frequently add children as authorized users to help them establish credit history before they can qualify for their own cards. The child does not need to physically use the card; the history still reports to their file.
For a partner or spouse: Couples often add each other as authorized users to share rewards earning. All purchases on the authorized user card earn rewards that post to the primary cardholder's account.
What to Be Aware Of
The primary cardholder takes on the risk of the authorized user's spending. If the authorized user charges items the primary cardholder cannot afford to pay, that becomes the primary cardholder's financial problem. Only add authorized users you trust.
Some issuers allow you to set spending limits for authorized users. Check your issuer's tools before adding someone with unlimited access.
If you are added as an authorized user to improve your credit, the benefit depends on the account being in good standing. Being added to an account with missed payments or high utilization can hurt your score rather than help it. Confirm the account status before being added.