How Are Authorized User Tradelines Considered by Credit Scoring Systems?

The most common questions I get from customers are how they can establish the best credit or improve their credit scores. It is a very difficult question to answer without looking at their credit report. There are many ways to get a poor credit score so the advice is not as simple as the universal answer. The answer is going to change depending on the individual credit situation of each customer.

Regarding the question “How can I establish credit”, it is easier to answer because there are limited options to choose between creating or rebuilding a credit report and credit score. The same behavior when he was on his way to college at the age of. My dad added me as an authorized user on one of his credit cards.

Credit Repair | Tradelines, Authorized user, Credit repair

If you are not familiar with authorized user tradelines, you can read more about them here. Or, I can save you some time; An authorized user is a person who is added to another person’s credit card account. The authorized user is allowed to spend like the primary cardholder but without any payment or debt obligation. Almost all major credit card issuers will allow their primary credit cardholders to add authorized users to their accounts.

Authorized Users and Credit Scoring

All commonly used credit scoring systems will treat any authorized user account or “tradeline” as a scoring feature. This means in English if you are an authorized user of someone else’s credit card account and that account is reported or “equipped” to three customer credit reporting agencies, and it ends up in your credit report, it will be considered your credit score calculation.

In most cases, an authorized user credit card account will not be treated differently than if you were the primary cardholder. Balance, credit limit, account age, and account payment history will not be considered separately. If all of these credit card features speak well of you, the card will probably help your credit scores. And conversely, if the card is not managed, you will suffer the same credit score effects as the initial cardholder.

How authorized user tradelines are helpful

Capturing an authorized user tradeline has reached your credit reports, which can be helpful in a number of ways, as I described above. First and foremost, donors like to see positive information about credit reports and have nothing to do with your credit scores.

If the authorized user account is old, this will help increase the average age of your account, which is an important factor in your credit scores. If your authorized user account has a clear payment history, it helps your credit scores. And, perhaps most importantly, if the authorized user account has a lower balance than the credit limit, it is very helpful for your credit score.

If you want to associate yourself with a poorly managed account, an authorized user account is the only way to damage your credit score. For example, you would never want to add your account to an account that has a late payment history. And, you never want to associate your account with an account that has a balance greater than the credit limit. 

[1] From a written statement by the Fair Isaac Corporation on the Financial Services Subcommittee of the U.S. House of Representatives Committee on Monitoring and Investigation.