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.

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