Authorized user

What It Means

An authorized user is someone the primary cardholder adds to a credit card account so they can make purchases, usually with a card in their own name. The primary cardholder stays legally responsible for every charge, including the interestInterest rateThe yearly percentage a lender charges for borrowing money, not counting fees; the APR adds certain fees to show a fuller cost. See more and fees, and the authorized user owes nothing to the card company, Experian explains. Many issuers report the account on the authorized user's credit reportsCredit reportA record of how you've borrowed and repaid, kept by credit bureaus and sold to lenders, landlords, insurers and others who decide whether to deal with you. See more too, so it can help or hurt their credit depending on how the account is run.

How People Say It

• "My dad added me to his card to help me build credit."
• "She's just an authorized user, so the bill's on me."
• "Take me off your card before you max it out."

The Breakdown

An example couple. Ben has a thin credit file, so his partner Mia adds him as an authorized user on her card, which she has paid on time for years. The issuer reports the account to the credit bureausCredit bureauA company that collects information about how people use credit and sells it as credit reports; Equifax, Experian and TransUnion are the three nationwide ones. See more, and her long on-time record starts showing on Ben's reports.

Where it goes wrong. A year later Mia runs the balance up close to the limit after a car repair and misses two payments. myFICO notes that missed payments or high utilizationCredit utilizationThe share of your available revolving credit you're using, found by dividing your card balances by your credit limits. See more on the account can pull down an authorized user's FICO ScoreFICO scoreA credit score made by the company FICO from your credit report; base FICO Scores, including the widely used FICO Score 8, run from 300 to 850. See more as well as the owner's. Ben had no say over the spending and no way to fix it except by leaving the account.

What to watch for.

• Whether the issuer reports authorized users, and to which bureaus. Experian says issuers aren't required to report and choose what to send.
• The owner's habits. You take on their record for that account, the late paymentsLate paymentA payment that reaches the lender after its due date; on credit reports, one that's 30 days or more past due. See more along with the good months.
• How to get off. Experian says you can generally remove yourself by calling the issuer, and the account then drops off your report.
• For the owner: every charge the authorized user makes is yours to pay, so agree on limits first.

Good to Know

Three arrangements look alike and differ on who owes the money. An authorized user owes nothing; Experian says the primary cardholder is responsible for all charges, interest and fees. A joint accountJoint accountA bank or credit union account owned by two or more people, each of whom can usually deposit, withdraw, move money or close it. See more holder owes the whole balance, since the CFPB explains that the card company can collect it from either person, whoever made the charges. A cosignerCosignerA person who signs a loan alongside the borrower and becomes legally responsible for repaying it if the borrower doesn't. See more promises to repay if the borrower doesn't. Experian adds that it leaves late payments on authorized-user accounts out of its own credit reports.

Related Terms and Categories

• Credit score

  A three-digit number calculated from your credit report that lenders use to judge how likely you are to repay; common models run from 300 to 850.

• Credit report

  A record of how you've borrowed and repaid, kept by credit bureaus and sold to lenders, landlords, insurers and others who decide whether to deal with you.

• Credit utilization

  The share of your available revolving credit you're using, found by dividing your card balances by your credit limits.

• Cosigner

  A person who signs a loan alongside the borrower and becomes legally responsible for repaying it if the borrower doesn't.

• Joint account

  A bank or credit union account owned by two or more people, each of whom can usually deposit, withdraw, move money or close it.

• Credit history

  The record of how you've handled credit over the years, as shown on your credit reports: which accounts you've had, for how long, and whether you paid on time.

Debt and credit