Credit Sesame discusses the authorized user strategy and how it can affect your credit score.

Your credit score is a three-digit number that gives potential lenders or creditors a way to quickly gauge your trustworthiness as a borrower. Typically, credit scores range from 300 to 850, with higher scores translating to better creditworthiness. A better credit score is more than just bragging rights. It can make it easier for you to secure lending or financing when you need it. It can also save you a significant amount of money in the process. One method to increase your credit quickly is to become an authorized user on another person’s credit card account.

If we examine the average credit scores of individuals who have been added as authorized users on another’s account, we see the following:

Member status Added as authorized users Average credit score
Members 19.1% 661
Non-Members 15.2% 657
Source: Credit Sesame Surveyed credit-building activities of members and non-members between September 2015 and September 2016.

Even though the authorized user strategy is a proven method of raising credit scores, fewer than 1 in 5 people have been added as authorized users. Awareness should be raised about this useful strategy so that more people can use it to their advantage.

What is the authorized user strategy, and why is it important to understand?

Being added as an authorized user can quickly improve your credit score. There are a number of reasons that people may need help building their credit, so if you’re in this position, know that you’re not alone. Perhaps you’re young and just starting out and need to quickly establish credit to rent an apartment. Perhaps you missed a few payments, and now your credit could use some help.

In fact, adding someone as an authorized user on a credit card may improve both the primary cardholder’s and authorized user’s credit scores if both parties maintain a positive payment history and low credit utilization. However, potential negative impacts and shared responsibility should be carefully considered, emphasizing the importance of communication and trust between both parties involved.

Whatever the situation, there are some tried-and-true tactics that will help you improve your credit score quickly, and becoming an authorized user is one of them.

Still not convinced? Take a look at the numbers below.

Credit ranking 30 days 3 months 6 months 9 months 12+ months
800+ Excellent 1% 1% 1% 1% 1%
750+ Very good 1.5% 1.8% 2.4% 2.7% 3%
700+ Good 3.5% 5.2% 7.1% 8.5% 9%
650+ Fair 9.6% 10.6% 12.5% 17.2% 20%
600+ Poor 9.6% 11.9% 18.1% 23% 28%
550+ Bad 10% 18% 24% 27.5% 30%
Source: Survey of 2000 members and non-members May 5, 2018.

As you can see, becoming an authorized user is a great way to quickly improve your credit score, especially if you’re starting out with less-than-great credit. For individuals who had bad credit (a credit score below 550), becoming an authorized user improved their credit score by 10% in just 30 days. Fast-forward 12 months, and their score improved on average by 30%.

Improving your credit score using the authorized user strategy

Your credit score is determined by analyzing a number of factors, such as your payment history, the total amount of your debt, and more. Becoming an authorized user on someone else’s credit card or adding an authorized user to your credit card primarily relates to the length of your credit history.

While not the largest piece of your credit score puzzle, the length of your credit history does play a role in determining what your credit score will be. If your credit history isn’t very long-standing, becoming an authorized user on someone’s established account can lend you instant credibility and quickly improve your credit score. In addition to helping with credit history, being an authorized user can also help credit utilization, and possibly even credit mix depending on your current credit accounts.

What determines your credit score?

As we mentioned earlier, your credit score is determined by analyzing a number of factors:

Payment history (35%)

Your payment history is the single biggest factor that contributes to your credit score. This shows potential lenders how often your payments have been on time or if they have been late or missed.

Credit utilization (30%)

While this may sound complicated, your credit utilization is simply the percentage of your total available credit that you are currently using. This number is expressed as a percentage and, to keep the best score, you should keep your number below 30%.

Credit age (15%)

The age or length of your credit history also contributes to your score. To make the most of this factor, make sure to keep your oldest accounts open and in good standing.

Credit mix (10%)

Potential lenders like to see a mix of different credit types on your report, such as credit card accounts and an auto or mortgage loan.

Number of inquiries (10%)

Checking your credit score won’t hurt your account but hard inquiries, such as when you apply for a new credit card, can temporarily decrease your score. Limit the number of hard inquiries on your credit to minimize harm to your score.

Now that you know how your score is calculated, let’s take a closer look at how the average scores break down in the US in 2023

Age group Average FICO credit score
18 to 26 years (Generation Z) 680
27 to 42 years (Millennials) 690
43 to 58 years (Generation X) 709
59 to 77 (Baby Boomers) 745
78+ years (Silent Generation) 760
Source: Experian data from Q3 2023 published in January 2024.

Based on the data, it seems that credit score and age are at least indirectly related, meaning that as you age, your credit score also typically improves. This could be due to a number of factors, including more disposable income and a longer credit history.

Wondering what else you can do to improve your credit score? Let’s break down some tactics you can use to make a difference quickly.

What can improve your credit score?

Before you can start to work on your credit score, you need to know the proper steps to take that will help you see an increase in your credit score.

  • Check your credit report and dispute any errors. By law, each of the 3 major credit bureaus (Equifax, Experian, and TransUnion) are required to give you a copy of your credit report each year at no cost. It’s important to regularly check your credit reports to make sure the information they contain is accurate and up to date. While it may seem like a given that the information would be correct, you would be surprised at how many credit reports contain errors. In fact, as many as 35% of consumers in 2018 had errors on their credit report. These mistakes could have a serious, negative impact on their score. Carefully review your credit reports, and dispute any errors that you may find.
  • Make all of your payments on time. Your payment history is the single largest factor that contributes to your credit score. As such, it is important that you do your best to always make your payments on time. Believe it or not, even just one late payment can have a big impact on your score — and can haunt you for years to come. And remember, if you find yourself in a difficult position, many creditors are willing to work with you, which can make a big difference in your credit score.
  • Reduce your debt. Your credit utilization is the second largest contributing factor to your credit score. Your credit utilization is simply the percentage of your total available credit that you are using at any given time. You should always aim to keep this number below 30%; however, many of the best credit scores have a credit utilization of 10% or below.
  • Become an authorized user, or add an authorized user to your account. 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. By adding you as an authorized user, your trusted friend or family member is assuming financial responsibility for any payments you may miss or risk damage to their own credit. With this in mind, it’s important that you take this tactic seriously, as it is a big responsibility.
  • Diversify your credit. 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. Conversely, if you only have a student loan or an auto loan, consider applying for a secured credit card.
  • Limit the number of hard inquiries. While only contributing to 10 percent of your credit score, the number of hard inquiries into your credit can — and will — affect your credit score. To help keep your score in good shape, only apply for credit when necessary. And keep in mind that checking your own credit score will not hurt your credit score, in fact it can actually help to improve it.

We talked with Credit Sesame member, Tiffany, to find out how she raised her credit score by adding her brother as an authorized user. Below is a timeline that shows how her score improved 25 points in just 3 months.

Tiffany raised her credit with the authorized user strategy

25-year-old Tiffany was approached by her younger brother about adding him as an authorized user. She already had good credit and he did not have any. Knowing her brother was trustworthy, she added him in June 2018. As you can see by the timeline, because of adding him, her score rose 25 points in three months.

Action Date Score change Score
Brother asked to be added as authorized user June 2018 +0 765
Brother added as authorized user July 2018 +6 771
Brother bought plane ticket and paid it off August 2018 +9 780
Brother helped with freelance payment and decreased utilization September 2018 +10 790
Tiffany checked her credit score September 2018 +0 790
Source: Credit Sesame case data from 2018.

Tiffany saw a direct benefit by having her brother as an authorized user. Her brother also saw a benefit in that his credit displayed the payment history, credit utilization, and credit history. While her story was positive, there is also the chance of it having a negative impact if either the credit card holder or authorized user are not responsible. Think of it as two credit reports being affected by a single account, for better or worse.

Benefits of adding an authorized user to your credit card

The biggest benefit of being adding as an authorized user to a credit card account is obvious, the improvement it offers to your own credit score. The account holder’s responsible credit habits, by extension, become like your own, improving your score month after month. Usually, as an added bonus, adding an authorized is simple. Just contact your credit card company and speak to someone who can add an authorized user to your account. Most credit cards even allow you to add an authorized user through the company’s website or app. Make sure that it is an authorized user and not just an additional credit card holder. There is a difference, and an additional credit card holder may or may not have the credit card on their credit report.

Do authorized users affect your credit score?

In conclusion, being added as an authorized user to your credit card is a great way to improve your own credit score. Your credit score is calculated by analyzing a number of factors, including your payment history, credit utilization, mix of credit, length of credit history, and the number of hard inquiries into your credit. If your own credit score could use a boost in any of these areas, being added as an authorized user can help you to quickly see an improvement in your score. Simply contact your credit card company to add a user, and you’re on your way to enjoying your better credit score. Be careful to only add or be added to individual’s accounts who you trust and that you know will not put you in financial ruin.

You can get your credit score for free today and think about taking advantage of credit monitoring to ensure the accuracy of your credit reports.

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Originally published October 7, 2014

Disclaimer: The article and information provided here are for informational purposes only and are not intended as a substitute for professional advice.

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