Authorized user's bad credit won't hurt primary cardholder
Credit Score Report
Dear Credit Score Report,
someone with a credit score of 750 puts me as an authorized user on their
credit card -- when my score is 542 -- will it affect their credit negatively? -- Tonianne
Your poor credit history alone won't hurt the primary
cardholder's credit score. But if you aren't careful about how you use that
shared credit card, your borrowing behavior just might.
Your friend has a credit score
of 750, which suggests he or
she has a history of responsible borrowing. Your low credit score, meanwhile,
indicates that you have a short credit history or a record of less-than-careful
borrowing. By being added to that credit card, however, it should appear on
your credit report and -- assuming the card has a long, positive credit history
-- help improve your credit score. (You'll need to check with the card issuer
about its specific policies on reporting authorized accounts.) But the opposite
isn't true: Your credit history won't appear on your friend's credit report. "Being
added as an authorized user will not cause your credit history to be combined
with that of the primary account holder, so their good credit score will not be
affected" by your poor history, says Rod Griffin, credit bureau
credit bureau Experian's
director of public education. "The only change will be the addition of the
account to the authorized user's credit history," he says.
The card account's appearance on your credit report should
improve your FICO score, which is the score most popular with U.S. lenders. "To
the extent the account is in good standing, has a low balance and so on, the
person's FICO score is likely to benefit," says Jason Sprenger, FICO's
public relations manager.
That isn't necessarily true for other scoring models. For
example, VantageScore, the scoring model launched by the three credit bureaus
in March 2006, didn't always consider authorized user accounts. "VantageScore
was designed without including authorized users, but lenders can choose an
option to include them in the original version" of the scoring model, says
VantageScore President and CEO Barrett Burns. But it has adapted: Due to
requests from the market, the company began including authorized user accounts
when it launched the second version of its score, known as VantageScore 2.0, in
October 2010, Burns says.
Despite the possible benefits to your credit score, there are plenty of reasons for you to
remain cautious with that card. That's because by making you an authorized user,
your friend will be putting his or her own finances and credit history at
Why is that? First, as the authorized user, you aren't
legally responsible for repaying any debt accumulated on that shared account.
So if you run up a bunch of expensive charges that you don't have the cash to
cover, your friend will be the one left ultimately responsible for repaying the
Second, any trouble you get into with that account, such as the
previously mentioned large balances, can appear on both the primary
cardholder's credit history and your own. That means any mistakes you make
won't just hurt your credit but your friend's credit, as well.
Therefore, you should be less concerned about your past
credit problems hurting your friend's credit score -- and more concerned about
the impact any future flubs will have on that shared account. Otherwise, any financial
mistakes could also get in the way of your friendship.
See related: Credit card authorized users, joint account holders differ, VantageScore turns 5: What it is, and why it matters
Jeremy M. Simon is a former CreditCards.com reporter who wrote about credit scoring, economic data, credit card crime and other issues. He is based in Austin, Texas. He is a graduate of Vassar College and has previously worked for Thomson Financial in New York City, where he wrote about the stock markets, and Texas Monthly, as well as several publications in Austin.
Published: October 4, 2011