No credit? Become an authorized user

Becoming an authorized user on someone else’s credit card account is one of the best strategies for improving credit quickly. But, the best way for it to work and which is recommended is for the primary user’s card to have a good history of on-time payments and a high credit limit.

If you are one of the many people who have no credit at all and are looking to build a credit record, it is likely to benefit you more in terms of payment history than if you have been using credit longer and have setbacks to overcome.

But it can have a significant impact for newbies or rebuilders because it affects an important credit score factor called credit utilization, or the amount of your credit card limits that are in use. Payment history alone has the most influence on credit scores.

If you become an authorized user on someone else’s credit card, the issuer will send you a card with your name on it. But the primary account holder is responsible for paying charges on the account, not the authorized user.

Because the charges you make must be paid by the account holder, both you and the account holder must agree in advance whether you will use the card or simply appear as the authorized user. The effect on your credit is the same, even if the account holder never gives you the card to use.

If you can’t qualify for a credit card on your own, being an authorized user can help you bolster your credit history and can help with credit age, a factor in scoring. FICO.

Not being responsible for paying bills, being an authorized user on a credit card may not have a big impact on your credit score. But it does help those with little or no credit history bolster their credit files.

Authorized user status alone may not increase your chances of getting approved for credit cards and loans in the future. Lenders reviewing your credit history want to see how well you have managed your own credit accounts responsibly.

Being the primary holder of a credit account will have a greater impact on your credit score than being an authorized user.

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