Did you know that someone else’s credit can help build yours? If you are not eligible for a secured credit card to build credit, you may be able to get a line of credit with someone else.

An authorized user is someone who is a secondary person on an account. For example, if you started driving as a teen, your parents would have added you to their car insurance policy. It is their insurance account, but it also covers any damages you may cause.

Build Off Someone Else’s Credit

A parent, family member, or even a friend with established credit can add you to their credit card account. By doing so, they are agreeing to take responsibility for your purchases. 

An authorized user is different from a cosigner or joint account holder because the lender will not consider the user responsible for payments. That burden falls on the primary account holder.

Since the responsibility belongs with the account holder, they may be hesitant to add you as a user. It is important to discuss usage and payments, such as:

·      Offering the primary account holder cash in advance, like a prepaid card, so you can take advantage of building your credit.

·      Setting up a routine payment schedule.

·      Establishing a personal spending limit.

An authorized user can receive a card with their name on it. The primary account holder will be able to review all of their purchases. Both persons can make payments. 

Being an authorized user is the best way to build credit since you are piggy-backing off the primary account holder’s credit. It gives you a jump-start

By Admin