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Authorized Users


Guest ronaldmj
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Guest ronaldmj

Hello, I am a new member here and I must say it is the best credit forum I have visited.

Can someone give me a brief rundown on Authorized Users. I have recently been hearing a lot about it and have clients of mine who are trying to build credit and I think this would be perfect for them.

Anything you can share would be greatly appreciated.

Thanks

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It is best if you have a family member or very close friend that is willing to add you to a cc tradeline that has a long history, high credit limit and low balance. The cc history will help your average age of accounts if you have a relatively short credit history. The high credit limit & low balance will help your overall utilization. Both of these factors should give a nice bump in the fico score. Be careful that you are not added to one that is carrying a high balance as this will raise the utilization and can have a negative impact on fico. Hope this helps.

paw67

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The family member or such that is contributing these accounts; will need to check with their creditor to insure they have a policy of reporting authorized user accounts to all 3 of the major credit reporting agencies.

Also strongly caution the person benefiting from these such accounts, that it would be best to just give the owner back the extra cards issued. That way they just ride the reporting - but be respectful not to charge on this account.

Also they need to know that there will come an appropriate time for terminating their relationship on these accounts.

1. If they suspect that the owner has run into financial difficulty (then call the creditor to be removed) before negative reporting has time to affect their credit score.

2. If the owner of the account starts to carry a high balance; hurting the utilization - then it may be time to terminate the relationship.

* Note that loan officers processing mortgage loans - don't always recognize these accounts for what they are (only authorized user accounts). They will lump these together often when figuring up debt to income ratio thus hurting chances for approval.

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Glad you mentioned that - at this point I really don't think that it should - think that if you where a joint or co-signer that is when you start seeing the other user affect the credit scores.

As of yet, no one has confirmed this to be a problem on the authorized user side though, so worth keeping an eye on.

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