An authorized user is a person who has a credit card that draws from the primary cardholder's credit line. The primary cardholder is still fully responsible for the payments on the account. Although the act of adding an authorized user does not affect the cardholder's credit score, the authorized user's charges can.
Utilization Rate
The main way in which an authorized user can affect the cardholder's credit score is through the debt-to-limit ratio or utilization rate. When the authorized user spends on the credit card, it brings the debt on the card closer to the limit. CNN Money recommends keeping the debt to under 30 percent of the limit to avoid lowering a credit score.
Missed Payments
If the authorized user unexpectedly charges thousands of dollars on the card, the cardholder may be unable to afford the minimum payments. Missing payments will hurt the cardholder's credit score.
Prevention/Solution
To avoid ending up with more charges from the authorized user than anticipated, cardholders should ask the credit card company to set a lower credit limit on that card. In addition, cardholders should only add authorized users who they trust to spend responsibly.
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