Does adding an authorized user impact my credit score?

Adding an authorized user to your credit card account can offer various advantages. It can help the primary account holder meet spending requirements or earn extra points. Meanwhile, the authorized user can benefit by building their credit history and enjoying perks, such as lounge access with the Capital One Venture X Rewards Credit Card.

You might be curious whether the credit history of an authorized user will affect your own before adding them to your card. Here, we explain what you need to know about the details of authorized users.

How will adding an authorized user impact my credit score?

Most credit cards allow you to add authorized users, enabling them to make purchases on your credit line with their own personalized cards. If you're worried that this might harm your credit rating, rest assured. In reality, adding an authorized user is more likely to impact their credit score rather than yours.

When you add an authorized user, your account may show up on their credit report, meaning your account history, balance, and credit limit influence their credit score. This is why adding a user can assist someone in building or enhancing their credit — they benefit from your positive credit history. However, be aware that any missed payments or negative marks will also show up on their report, so it's advisable to add authorized users only if you manage your finances well.

On the other hand, while authorized users don’t show up on your credit report, their activity will. You remain responsible for any purchases they make, including those they might not inform you about. If they make charges without your knowledge and it leads to carrying a balance or missing a payment, it could adversely affect your credit.

Advantages of adding an authorized user

Adding users to your account can provide benefits for everyone involved. For instance, purchases made by authorized users can earn rewards, allowing you to enlist family, friends, or employees to accumulate extra points and miles or fulfill requirements for welcome offers and spending bonuses.

Certain cards, like the Chase Sapphire Preferred® Card and The Platinum Card® from American Express, may offer some of their extra benefits to authorized users.

While some credit cards limit benefits to the primary account holder, others are more generous with their perks. For instance, the Capital One Venture X allows you to add up to four additional cardholders at no cost, and each of these users gains access to both Capital One and Priority Pass lounges, along with the ability to bring up to two guests without extra charges.

In summary

As long as you trust the individuals you're adding, there's minimal reason to hesitate in adding users to your account. Establish clear guidelines regarding their use of your card and regularly check your account activity. By doing this, you should be in a good position.