Will My Credit Score Go Down If I Add an Authorized User?

Many individuals consider adding others as authorized users to their credit card accounts. A frequent question is whether this practice negatively affects the primary account holder’s credit score. Understanding how authorized user accounts function is important for both the primary cardholder and the individual being added. This article clarifies their potential influence on credit profiles.

What is an Authorized User

An authorized user is an individual granted permission by a primary cardholder to make purchases on their credit card account. They receive a physical card and can use the account for transactions, but are not legally responsible for the debt incurred. The primary account holder retains sole legal responsibility for all charges made on the account. Common reasons for adding an authorized user include providing spending access to family members or for general convenience in managing household expenses.

Impact on the Primary Account Holder’s Credit Score

Adding an authorized user to a credit card account typically does not directly cause a negative impact on the primary account holder’s credit score. The primary account holder remains solely responsible for all charges made to the account. The impact on the primary account holder’s score stems from the account’s overall activity and how it is managed. Consistent on-time payments contribute positively to a credit score, while missed or late payments can lead to a significant negative impact. Keeping the credit utilization ratio low, which is the amount of credit used compared to the total available credit, is beneficial. The primary account holder’s credit score will therefore reflect the responsible or irresponsible handling of the account, irrespective of who makes the individual charges.

Impact on the Authorized User’s Credit Score

Being an authorized user can influence their credit score, often positively, if the primary account is managed responsibly. The primary account’s payment history, credit limit, and balance information may appear on the authorized user’s credit report. If the primary account demonstrates a history of on-time payments, low credit utilization, and a long account history, these positive attributes can contribute to the authorized user building their own credit profile. This is beneficial for individuals seeking to establish credit. Conversely, if the primary account experiences negative activity, such as missed payments, high balances, or excessive credit utilization, these issues can also be reflected on the authorized user’s credit report, potentially decreasing their score. The impact varies, as not all credit card issuers report authorized user activity to all major credit bureaus, and some credit bureaus may also treat authorized user accounts differently in their scoring models.

Key Considerations Before Adding an Authorized User

Before adding an authorized user, consider the level of trust involved, as the primary account holder bears full financial responsibility for all charges; establishing clear communication about spending limits and repayment expectations is important. Regularly monitoring the account activity helps ensure spending remains within boundaries and prevents unauthorized transactions. An authorized user does not gain legal ownership of the credit account and cannot perform actions such as requesting a credit limit increase, closing the account, or redeeming rewards. If circumstances change, the primary account holder can remove an authorized user by contacting their credit card issuer. While being an authorized user can aid in building credit, it does not provide the same level of financial independence or control as having a primary credit account.