Does Getting on Someone Else's Credit Help Your Credit Score?

Your chances for improving your credit score by getting your name added to a friend or family member's credit card account are limited. Some creditors and lenders don't use such accounts to gauge financial responsibility, and a dispute with your credit benefactor could hamper your efforts to build credit altogether.

Authorized User

The credit card industry refers to someone who can legally use another person's credit card as an authorized user. In such cases, cardholders have their card issuers add another person's name to their account as an authorized user. They also may receive a separate card that bears the original cardholders account number. The biggest difference between the two cardholders is that the authorized user isn't held responsible by the issuer for making payments on the account. Still, the user's credit score could drop if the original cardholder makes late payments on the account.

Creditworthiness

Credit reports usually include authorized-user accounts, but the Experian credit-reporting company indicates that may not boost an authorized user's credit rating with creditors and lenders. Some creditors and lenders exclude the accounts as they consider credit and loan applications, they know authorized users aren't responsible for repaying the debt associated with such accounts. Therefore, authorized-user accounts generally arent a good measure of how the users manage debts, so some credit-scoring models are designed to ignore the accounts.

Joint Account

An authorized-user account would help establish a credit history for someone who doesn't have one, but adding that person to an established account as a joint accountholder might prove more useful. Experian notes that joint accountholders share responsibility for paying debts accumulated on a credit card, so they could establish a good credit rating if the account is paid on time each month. A joint accountholder may eventually qualify for a separate credit card if the joint account remains in good standing.

Considerations

Bankrate.com writer Leslie McFadden warns against relying on authorized-user accounts to establish a credit history. McFadden notes that the original cardholder and authorized user could have a disagreement that causes the cardholder to remove the user from the account. The user could lose the only credit card he has as well as the opportunity to build a credit history. Secured credit cards are another option for people who need to establish credit. Secured card issuers require a cash deposit that establishes a credit line for cardholders. A co-signer isnt required because the issuer holds the deposit as security on the account.