Authorized user on your credit report: Does it help or hurt?

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Authorized user on your credit report: Does it help or hurt?Authorized user on your credit report: Does it help or hurt?

What is an authorized user?

When a spouse or your sibling or some other person owns a credit card and they make you an authorized user of the card, you have no legal responsibility for the card. But, this card will show up on your credit report since you are an authorized user.

If the account is in good standing, then this will be beneficial to you.

If there are significant late payments, maxed out limits – this will drive your credit score down.

Why would something that you do not own and you are not legally responsible for show up on my credit report?

The reason behind this goes back a number of decades. This goes back to a time when, traditionally, the husband was the working person in the household, all of the credit was in his name, and the wife would not work.

Often times, the wife would use the credit card as an authorized user.

Unfortunately, if the couple divorced, she would have no credit because the credit was never in her name.

So, a federal law was passed which would allow an authorized user to get the benefit or penalty of the account.

This is why the account affects your credit report even if you are just an authorized user.

For FICO, the dominant score used for lending decisions, less weight is given to an authorized user account as opposed to one that you own or are a joint owner on.

This is partly because there are many people who sell authorized user status to people in need of improved credit.

We do not recommend doing this. If you are seeking more legitimate methods, check out our article on improving your credit score.

FICO also realizes that if there is a negative on the account, this is out of your control as an authorized user. You have no legal responsibility for the account.  But it still can hurt your score.

If you have an authorized user account and it is positively affecting your credit, then keep it.

However, if it is negatively affecting your credit, ask the owner to call the company and have you removed from the account.

Usually, this results in the negative parts coming off of your credit report.

If the negative effects are still on your report after you have been removed from the account, you can dispute the error.

It is also helpful if you keep proof that you have been removed from the account.

Typically, the credit bureaus remove this without issue.

We hope this is helpful to you!

If you live in Alabama and you have any questions, feel free to get in touch with us.

We would be glad to help you in any way we can.

You can reach us by phone at 1-205-879-2447, or you can fill out a contact form and we will get in touch with you quickly. 

Thanks for reading, and have a great day!

-John Watts

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