One of the simplest ways to boost a person’s credit score is to be added as an authorized user on the credit card account of a responsible card holder. Responsible means someone who has never had a late payment, over-the-limit fee, or returned check fee on their account. Preferably, the balance on the account will be less than 25 percent of the credit limit as well. It is simple if…well, it isn’t so simple. Here are a few things that you and the cardholder may want to consider before becoming an authorized user.
Things to Consider Before “Piggybacking” on Another’s Credit
You will only receive a boost to your credit score if a separate card is issued in your name.
The primary cardholder is the only one who will be responsible for paying back the balance as far as the credit card issuer is concerned. Since the additional card will be mailed to the primary cardholder’s address, if you have doubts about the responsibility of the authorized user, do not give them the card. That way they can boost their score and you do not have any risk to worry about.
FICO does look at authorized users when building a credit score, but lenders may not. So, after your score has gained a little ground, you may want to seek a credit card account of your own. Lenders recognize all credit card accounts if they are in your name.
Some credit repair companies will try to convince you that ”piggybacking” on a stranger’s account is a good idea if you cannot find anyone willing to add you as an authorized user. FICO’s website says this about piggybacking:
”To protect lenders and honest consumers, the FICO 8 formula substantially reduces any benefit of so-called tradeline renting. That’s a credit repair practice that entices consumers into being added to a stranger’s credit account in order to misrepresent their credit risk to lenders.”
Essentially, FICO will ignore a piggyback account.
Keep in mind that every habit of the primary cardholder becomes your habit in the eyes of the credit reporting agencies. Their missed payment is your missed payment, etc. Still, if you become an authorized user on the credit card account of a responsible person, you will see a boost to your credit score. That boost may not be significant enough to help you get a car loan or a mortgage, but it should be enough to help you get a credit card account of your own.