Yes, authorized users do build credit. You can actually build a good or excellent credit score just as an authorized user on a credit card. When you become an authorized user, the account is added to your credit report, which means on-time payments by the primary cardholder will help you build good credit history.
Becoming an authorized user on the account of someone with good, established credit can give you a nearly instant boost to your own credit score. ... Having a good mix of credit types can also help to improve your credit score. If you only have credit cards, consider applying for a credit builder loan.
Most credit bureaus track any authorized user activity in their annual credit reports, where you'll find your credit score. Your credit history makes up 15 percent of your overall credit score. By piggybacking off of someone with established credit, you can bulk up your own report and earn a higher credit score.
Issuer policies
| Issuer | Does the issuer report authorized user activity to the credit bureaus? |
|---|---|
| Capital One | Yes. |
| Citi | Yes. |
| Chase | Yes. |
| U.S. Bank | Yes, unless the primary account is delinquent. |
How long will realizing the benefits of piggybacking take? Another piggybacking advantage is the speed with which an authorized user account is added to your credit report after the request is made to the card company — typically within 30 days.
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The Impact of Being Removed
You can typically get points back over time by building your credit score with your own credit accounts. If you're the primary account holder, removing an authorized user won't affect your credit score. The account will continue to be reported on your credit report as normal.
How to build your credit as an authorized user
Authorized users receive their own credit card that they can use to make purchases. However, it's worth noting that the primary account holder is responsible for making all payments toward the card's balance.
Some credit card companies let you add an authorized user without providing that individual's Social Security Number (SSN). You only need their name, birthday and address in some cases.
It's generally best to stay as an authorized user on your parents' credit card accounts until you've built up your own credit and are financially prepared to handle your own credit card payments. If you think you're ready to make the move to a credit card of your own, read on.
The action of adding your child to your existing credit card account won't have any impact on your credit score. Nothing on your credit report indicates whether your credit card is used by authorized users or just the primary account holder. Yet your credit could be impacted if your child makes charges on the account.
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