Do I use credit once I am an authorized user?

CPN Tradeline

Becoming an authorized user can also help you when it comes to credit utilization – what good would it do otherwise? 30% of your FICO scores are based largely on how you manage the balance-to-limit ratio on your credit card accounts.

An authorized user account will be factored into your revolving utilization ratio once it is added to your credit report.
credit report.
Assuming the cardholder has a good habit of using only a small percentage of the card’s available credit limit, their credit scores could also benefit from that good habit.

Another way authorized users build credit is by increasing the average age of the accounts on their credit report.
Age matters when it comes to credit scores. When it comes to scoring models, the older your average credit age, the better.

It’s worth mentioning there are some risks, but don’t panic, just keep certain points in mind and you’ll be risk-free, as long as you know how to handle yourself.

While knowing how authorized users build credit can be a smart credit-building strategy, it can also be counterproductive if not done carefully.

Here’s how there’s a chance that an authorized user on someone else’s card can drag your score down, instead of helping you.

If you’re added to an account with a history of late payments or a card that’s used a lot, it could hurt your credit score.
But this is a problem that is usually easy to solve and can also be prevented.

When a card on which you are an authorized user begins to damage your credit, you can request to be removed from it. Remember, you have no legal obligation to pay the debt.

Once removed, you can dispute the account with the credit bureaus and request that it be removed from your reports. It is recommended that if you are considering adding someone to your credit card account as an authorized user it should be someone close to you, with whom you can sit down and discuss the terms and come to an agreement to have a good partnership and both of you will benefit.

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