The majority of credit card companies allow you to add a second person (referred to as an "approved user") to your credit card account without having to have that individual apply for the card themselves. A credit card bearing the authorized user's name is given to them, and they can use it exactly like the main account holder. The authorized user's purchases are all applied to the same account and appear on the same credit card statement. Both the primary account holder and the authorized user share the same credit limit. When either of them buys something, their available credit goes down. An authorized user is not subject to a credit check when they are added to a credit card account, unlike a joint account holder. While certain rewards credit cards give a benefit if you add an authorized user to your account, some credit card companies may charge a fee for doing so. On August 1, 2010, this entry was published.
Permissions for Authorized Users
The primary account holder's full credit card privileges are extended to the authorized user, who is not held accountable for any purchases made with the card. The authorized user will not be involved in any lawsuits involving the account's debts, even if they were the ones who made the purchases. Authorized users are permitted, but not required, to make a payment on the account. Authorized users can not change the account's address, add more authorized users, ask for an increase in credit limits, or bargain for a lower interest rate. This is done for security reasons.The Impact of Credit History
If the credit card issuer reports authorized user accounts to the credit bureaus, the credit card account history may appear on the authorized user's credit report. If the account has a track record of on-time payments, that's wonderful. However, if the credit card payment has a history of making late payments or exceeding the credit limit, that's a negative. There's a significant probability that the credit card issuer does not routinely report approved user accounts to the credit bureaus if one does not appear on your credit record. You can find out if the authorized user account will appear on your credit history by giving the card issuer's customer care a simple call. Following the 2007 subprime mortgage crisis, FICO score computations were revised to give authorized user accounts less overall weight and to eliminate authorized user accounts created solely to raise credit scores. For instance, if someone pays a credit repair agency a charge for authorized user accounts, it's likely that FICO scores won't take that account into account when determining their credit score.Adding a User is Authorized
Call the company that issued your credit card or log into your online account to add an authorized user. The card issuer will need personal information from the authorized user, like their name, address, date of birth, and social security number, in order to process the request. The number of authorized users you can add to your account may be restricted by the firm. And it's probably for the best because it gets more difficult to keep track of charges the more people have access to your credit card. You may be able to set various spending caps for each authorized user on your account with some credit card companies. Changing each person's quota is frequently as simple as entering it into your account.Eliminating a Licensed User
It's almost as simple to end the authorized user connection as to begin it. Simply ask to have the authorized user removed by calling the credit card company or logging into the primary account holder's online account. The user's credit card will be disabled, making it impossible for them to make purchases.(FAQs)
How soon will an authorized user notice a change in their credit score?
When new information becomes available, credit ratings are updated. The score can change once your credit card provider informs the credit bureaus about the authorized user. Any other activity in the report will determine whether the score updates or not. The benefits of an extra line of credit could be canceled out by bad news from somewhere else.What advantages come with adding a credit card authorized user?
The majority of the advantages will go to the additional authorized user rather than the principal cardholder. A card account can be kept active with the help of an authorized user, and their purchases may help them reach any welcome-offer thresholds. Aside from these minor benefits, the rest of the benefits are only for people who are allowed to use them.