What exactly is an authorized user?

There seems to be a lot of confusion about the role of an authorized user on a credit card account. An authorized user is someone who has permission to use another person’s credit account. They are not responsible for the account’s repayment and they are not able to make changes to the account. The primary borrower retains all control over the account and can add or remove users as they see fit.

Many parents have taught their children how to use credit using this safety net. In the past, the account’s history was also reported to the child’s credit reports, helping him or her establish good credit. Unfortunately, this benefit was abused and no longer exists.

People looking to improve their credit standing unscrupulously used the role as authorized user to piggyback on a stranger’s good credit. In response to this fraud, the Fair Isaac Company has removed authorized user accounts from its scoring model. Authorized user information is also excluded in calculating your VantageScore.

The bottom line is that being an authorized user no longer has the potential to improve your credit score; however, it might be a good way to safely learn about the wise use of credit. If building good credit is a priority, consider getting a secured credit card instead.

Kim McGrigg is the former Manager of Community and Media Relations for MMI.

  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.

  • Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.

  • The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

  • The Council on Accreditation (COA) is an international, independent, nonprofit, human service accrediting organization. Their mission is to partner with human service organizations worldwide to improve service delivery outcomes by developing, applying, and promoting accreditation standards.

  • The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.