Authorized users don't have to share credit reports


Opening Credits
Columnist Erica Sandberg
Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families." She writes "Opening Credits," a weekly reader Q&A column about issues for people who are new to credit, for

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Question Dear Opening Credits,
If someone wants to make me an authorized user on his credit card, what info of mine will he need and what info of mine will he have access to? For example, when he adds me as an authorized user, will he also see that I have my own cards and accounts in my name?   -- Bill


Dear Bill,
In most cases, a person wanting to add you to his account would just need to know your name and date of birth. Social Security numbers aren't typically required, though some creditors do ask for them as well. With this limited information, the account owner can request that the credit card company -- either by phone call or through the card website -- send a card imprinted with your name to his or your  address

The primary account holder won't be able to pull your credit reports, because under most circumstances, individuals do not have legal access to anyone's other than their own. Consequently, the person who is considering you as an authorized user can't see your current and past accounts or anything else that shows up on your file unless you choose to share it. The credit card company won't pull your reports or your credit scores to qualify you for the card, either. Since the account already exists, there is no qualification process. Ownership and liability for the account doesn't change.

However, it would make sense for the person granting charging rights on his personal account to ask to view your credit report. It would definitely help him make a smart decision. Banks analyze lending risk by checking these reports, since they provide accurate and objective insight into a person's financial habits. Seeing what the person has been up to would either give the account owner peace of mind or would sound alarms.

The reverse is also true. As an authorized user, you may want to know what you're getting into with the owner. After all, the account will show up on your credit reports as well as his, and the activity will be factored into your credit scores. In the event that the balance reaches and remains at the charging limit, or payments aren't made on time, the credit ratings of all cardholders will take a hit.

In the end, though, more responsibility falls on the shoulders of the account owner. If you do charge the card up but don't pay what you owe, the owner will be liable for the debt, not you. Sure he can take you to court and make your life miserable, but the credit issuer can't pursue you for collections or name you in a lawsuit. In fact, you can excuse yourself from the account at any time, usually with just a brief phone call to the issuer, even if you're the one who went hog-wild with the card. Not that you'd do such a thing, but it's possible.

On a positive note, you could gain quite a lot from the deal if the account is perfectly managed. Maybe you've never had a credit card or loan in your name, so don't have a credit history yet. Or you need to repair your credit reputation after making a mess of it. Suddenly, as an authorized user, you'll have that great account history on your reports. FICO and other credit scoring systems will then jump in, plug it into their mathematical models and your scores will rise. A single credit card that is in steady use, carries over no debt and is always paid on time can make a huge difference.

If you do enter into this arrangement, I urge you to do so with complete transparency and a set of rules. Form a contract, outlining the terms of your roles. That may be to spend only at certain times and places, and up to fixed amounts. Will you need to repay the owner for your charges? If so, specify when. For example, that may be within a certain number days when the bill comes due. Or maybe you can get the card, but not use it, which would make things really simple. As long as you both treat the account respectfully, everyone should be come out a winner.

See related: 5 questions every authorized user should ask

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Published: September 16, 2015

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Updated: 10-21-2016

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