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Chapter 2: Pros and Cons of Being an Authorized User

Becoming an authorized user is seen as an effective solution for individuals with limited credit history. The arrangement offers the potential to build credit and improve credit scores. However, it’s crucial to acknowledge that being an authorized user is not always a guaranteed method to boost your credit score. There are risks involved. This includes potential negative impacts on your credit if the primary cardholder fails to manage the account responsibly. Let’s go over the pros and cons of this arrangement.

In this chapter, we will delve into the complexities of becoming an authorized user. Together, we will explore how it can contribute to building credit, along with other associated benefits. We will also examine the advantages this setup provides to the primary cardholder. We will also look into the risks that you may undertake should you choose to become an authorized user. This way, you are not going into the arrangement with the notion that it will magically fix all of your credit woes.  

How Does Becoming an Authorized User Help Build Your Credit?

Let’s say your primary cardholder has had a credit card for several years and always pays their bills on time, as soon as they add you as an authorized user on their account, that good credit history gets included on your credit report

This change is because credit bureaus report authorized user accounts to credit reporting agencies. By piggybacking on the positive credit history of the primary account holder, authorized users can benefit from the responsible use of credit without assuming the full risk. This can help individuals establish or rebuild their credit history, particularly for those who have limited credit history or have encountered financial setbacks that have damaged their creditworthiness. 

What Are the Other Benefits of Becoming an Authorized User?

Aside from building credit history, becoming an authorized user gives you access to a line of credit associated with someone else’s account. This arrangement lets you make purchases or transactions even if you don’t have your own credit card.

Additionally, there are the benefits that we covered in the previous chapter. Being an authorized user can help you learn responsible credit card behavior by observing the habits of the primary cardholder. 

This arrangement can simplify financial management among family members by consolidating family spending in a single account, making it easier to manage a family budget. 

Authorized users can also access rewards and benefits that they may not qualify for on their own.

Additional Benefits of Becoming an Authorized User

  • Credit Score Improvement: When someone with good credit adds you as an authorized user on their credit card, your credit report may show their positive history. If they keep their card balance low and pay on time, it can help boost your credit score. This can be extra beneficial for people who are looking to take out a loan but their scores are not quite qualified. The same is true for those who want to apply for a credit card but cannot meet the requirements.
  • Credit Mix Enhancement: Being added as an authorized user can diversify an individual’s credit mix, which is a crucial factor in determining credit scores. By adding different types of credit accounts, such as credit cards, mortgages, and installment loans, individuals can potentially improve their credit scores and overall creditworthiness.

The primary cardholder can also reap several advantages by adding authorized users to their account. Firstly, they may earn rewards or incentives based on the spending activity of authorized users, effectively maximizing the benefits of their credit card usage. Additionally, higher spending levels from multiple users might qualify the primary cardholder for increased rewards, bonuses, or perks offered by the credit card issuer. 

For primary cardholders who use their credit sparingly, having an authorized user is also beneficial because it keeps the account active. 

What are the Cons of Being an Authorized User?

When considering becoming an authorized user on a credit card account, it’s important to weigh the potential drawbacks alongside the benefits. It shouldn’t be viewed as a fix-all solution, but rather as a decision that requires careful consideration of its implications.

Cons of being an Authorized User


  • Dependency on the primary cardholder’s creditworthiness: The primary cardholder’s financial behavior will directly impact your credit score. If your primary cardholder misses payments or accrues high levels of debt, that will come out in your credit report.
  • Limited control: Authorized users have restricted control over the account. This means you may not be able to make changes or manage the account independently.
  • Potential credit report errors: Errors on the primary cardholder’s account can affect the credit reports of authorized users. If there are any inaccuracies in payment history or credit usage, it will also appear on your credit report. If the primary cardholder does not dispute it, you may not be able to do so.
  • Relationship risks: Disputes or disagreements over account management can strain relationships between the primary cardholder and authorized user.

By carefully considering these pros and cons, both primary cardholders and authorized users can make informed decisions about whether this credit-building strategy aligns with their financial objectives and risk tolerance levels. 

While it can offer a quicker path to establishing credit history and improving credit scores, caution is also warranted. You will need to learn to manage the risks to ensure that you protect your financial health. 

After evaluating the risks and benefits, what’s next?

In the upcoming chapter, we’ll cover the process of becoming an authorized user, offering insights into how to navigate this arrangement effectively. We’ll explore key considerations, such as selecting the right primary cardholder and understanding the responsibilities involved. By understanding the steps involved and making informed decisions, you can become an authorized user with confidence. 

Next: Chapter 3: Becoming an Authorized User – Navigating the Process. Here, we’ll examine the steps involved in becoming an authorized user. We will provide you with practical advice on selecting the right primary cardholder and understanding your responsibilities. This chapter will equip you with the knowledge and confidence to embark on this credit-building journey effectively.