How To Use Authorized User Accounts Correctly

What exactly are authorized user accounts? A good example is a parent authorizing their college bound child to use their credit card “for emergency only”. The person who is the owner of the card adds who they want to their account. The upside for this is if the added person does not have great credit, they benefit from the original owners good credit. In the last five years lenders have started to frown on this practice. In fact at the end of 2008, Fair Isaac Corp., put a stop to most authorized user accounts because of people abusing this method.

Some credit repair agencies that worked on the edge of legality began to mass market third party authorized user accounts. This caused lenders to view the resulting credit scores as fraudulent. Inflated scores do not represent true credit worthiness of the authorized user. There are credit repair benefits from these types of accounts. If there’s a legitimate relationship between the owner of the account and the authorized user, Fair Isaac will acknowledge that and the benefits are allowed. It is one tool in a credit repair situation. It is not the only option to credit repair and should not be your only method. You must also be proactive in rebuilding your own credit.