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Does being an authorized credit card user help to build/rebuild one's credit history?

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Published: November 13, 2014

The answer is yes, although the FICO score gives much lesser weight to an authorized user's account than it used to.

Just like many other things in life, the benefits of being attached to someone else's credit card account have fallen victim to abuse.

Adding someone with a questionable credit file as an authorized user is called piggybacking, and it used to be one of the most favorite weapons in a shady arsenal of credit repair services.

Not surprisingly, that cunning technique didn't sit nicely with FICO, as they don't like it when gamers artificially boost one's credit score. The ability to predict a borrower's behavior and risks to lenders with reasonable accuracy and precision is the reason why FICO is the number one credit algorithm in the world. So it should come as no surprise that their latest scores algorithms (starting with FICO 08) address this issue directly.

Having said that, FICO still considers an authorized user's account, so no one who is building their credit history should ignore this easy way to get some gentle nudge in the right direction. If you have anyone with a stellar credit history who is willing to open an authorized user's account for you, go for it! The question is, of course, how safe it is for a primary card holder.

Safe? Not really!

There is one rule I strongly recommend you to follow. When a stranger asks you to open an AU account for them, say no. It doesn't matter if they give you an incentive to do so. Actually, strike that: if anyone offers you an incentive for it, run, don't walk.

That leaves friends and family. No brainer, right? Why wouldn't you do a favor to your good buddy, especially since it doesn't cost you anything?

Doesn't it?

You are fully responsible for all charges on your account including the ones made by your authorized users. In the very least, investigate why your friend needs this favor from you in the first place. Is she building her credit or trying to repair it? If the latter is true, than what was it that happened to her credit in the first place?

Old habits die hard. Unless you trust somebody 100%, I would avoid adding a friend as my AU. I'd rather lend them money. And I hate lending money to friends because you can lose both easily.

So, that leaves the family, right?

Indeed! Your spouse is your closest ally. If you don't trust her with a credit card, you have a bigger problem that needs to be addressed before anything else.

And no one can benefit from your good credit file like your kids. Those who are at the very beginning of building their credit history will find a huge value in getting piggybacked to your stellar credit file. But does it mean you should completely trust your teenage kid to always do the right thing?

I'm sure you know better than that?

Trust but verify!

There are ways to minimize potential risks from having an authorized user--especially when it comes to a teenage kid.

First of all, you must always check your AU's credit card statements. I know, I know, you won't go through your kid's correspondence (yes, I mean email), but this is different. Your AU must know they are being watched and they must be on board with it.

Second, set up alarms for a large purchase. How large? I don't know, it's up to you. Try $300 or $500--whatever better corresponds to your comfort level.

Setting up an authorized account for your kid has two major benefits. It helps them improve their credit standing from early stages of life, and it gives you a chance to teach them to use their credit responsibly. They will be thrilled to have their own credit card and you will have a chance to train them to live within their means and pay their bills in full every month.

Because, you know, habits die hard, which is a good thing for good habits!

This is a post by Andy Shuman, a credit and travel expert who blogs at He writes and blogs during and between trips that he enjoys free of charge mostly due to creative use of credit card offers. He believes that credit cards are much more than just a convenient way to pay for a purchase, and that the benefits of responsible credit habits can go far beyond getting the best rates for loans and mortgages.

Andy is the author of bestselling books from Lazy Traveler Handbook Series available on Amazon. When he's not traveling, he lives with his beautiful wife and daughter in Brooklyn, NY.

Questions? Suggestions? Keep them coming!

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