3 Tips About Authorized User Accounts

A sometimes controversial method of boosting your credit score is using authorized user accounts to “borrow” someone else’s good credit. This does still work to a degree and in some ways and can be a short term strategy to give a quick shot in the arm to your credit score.

In a nutshell, the way the strategy works is a family member adds you as an authorized user on their credit card, then they have the card sent to them and either just keep it or destroy it. Since you’ve been added to the account as an authorized user, within a month or so that account starts to show up on your credit report.

However, things have changed a bit with the new FICO ‘08 scoring and you need to be aware of potential pitfalls if using this strategy as a credit score booster.

Here’s 3 main points to bear in mind before trying this:

1. With the new FICO ‘08 scoring changes, they are filtering some user accounts out of the scoring model based on if they appear manipulative or not.  Mainly this applies to authorized user accounts that in the past have been sold as a service by some shady credit repair companies. which is the primary point of controversy. While the actual filtering methods are a mystery, in general accounts by immediate family members should still be calculated. If it’s someone completely unknown to you, it may not. And whatever you do, don’t pay a company for this as a “service” as that may constitute an illegal or fraudulent act.
2. Even if an authorized user account results in a nice score increase, it may not be as useful as you think. Why? If your credit score appears to be primarily made up of authorized user accounts, some lenders will see that and still decline your application no matter how high your actual score is.
3. It’s not a good long term strategy. The best way to ensure the most usable credit is to build your own. Authorized user accounts are typically most useful as a short term method to help get your foot in the door with a wider choice of lenders than you might otherwise have.

The bottom line here with authorized user accounts is it can certainly help if the situation is right and if used sparingly, but don’t expect it to be quite the magic credit repair bullet it’s made out to be.

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