Can Being an Authorized User Negatively Affect My Credit Score?

Becoming an authorized user is one of the best ways to own a credit card because you do not have a legal responsibility to repay the balance and it can be positive for your credit history. On the downside, being an authorized may negatively affect your credit rating and ability to gain credit if the primary borrower mishandles the account.

In the balance

Being an authorized user can negatively affect your credit score because you and the primary borrower share the history on the account, so missed payments by the primary borrower damage your credit rating, too. Missed payments can take more than 135 points off of your credit score and stay on your report for seven years, according to Les Christie of CNN. On-time payments improve your credit rating.

Debt-to-Income Ratio

Lenders will probably include the balance on an authorized account in your debt-to-income ratio. Debt-to-income (DTI) ratio is your monthly debt obligations divided by monthly income. Lenders usually do not offer credit when a DTI exceeds 35 to 50 percent with the new loan included. The creditor may have special rules for authorized accounts, such as only including them when the primary borrower is a relative or spouse.

Alternative

Unless you completely trust the primary borrower to pay the credit card bill on time, you should avoid becoming an authorized user. You can probably get a credit card on your own so you can control the payments on the account. For example, secured credit cards have very high approval rates because the lender requires a security deposit against the credit limit. Retail and gas station credit cards also have high approval rates but hefty annual fees and high interest rates.

Make it Temporary

If an authorized account is your only option for obtaining credit and building a credit history, use the account until you build enough history so that you can obtain an unsecured credit card on your own. You can ask the primary borrower to contact the creditor and have it remove you as an authorized user. Follow that up by checking your credit reports for the authorized account for free from Annual Credit Report. You can ask the credit bureaus to remove you as an authorized user when you no longer have your name on the account.