So over the course of my career as a credit consultant, I’ve seen thousands of people increase their credit scores by adding tradelines or using the authorized user card method. This strategy is idea for people with less than 3-4 open accounts or if their credit report has relatively newer accounts, or no open credit cards.
What is a tradeline aka authorized user card
Any person with an open credit card, is allowed to add on an additional person or more to that card, as an “authorized user..”
Parents add their kids to their credit cards as authorized users.
About a month after a person is added as an authorized user, that credti card begins to report on the aduthoized users credit report, with all the positive payment history associated with that card.
So if I’m added today to my friend’s Capital One credit card that he opened 10 years ago, then by next month, it will show on my credit report that I have made ontime payments on a 10 year old Capital One credit card.
This has a positive impact on the credit report.
This video explains how you can use this process to increase your score:
When is it a good idea to get on as authorized user :
Some consumers may see a 40-50 point score increase from getting on as an authorized user, whereas others may see barely any increase what’s ever.
Generally people with relatively new credit and/or less than 3 open accounts will benifit from being added as an authorized user.
You can expect a 30-40+ poiint increase under any of the following scenarios:
You have no open accounts at all. and you’re getting added to a one or more credit cards that’s 10 years or older in age
You have a handful of open accounts, none of them are older than a year or two, and if you’re getting added to one or more cards that is 10 years old older in age
In the scenario above , if you get added to a 5 year old credit card, the score may go up 15-20 points.
When an authorized user card won’d increase your credit scores:
Consumers with seasoned credit, who have more than 5-6 very old credit cards won’t find it benificial to get added to an authorized user card. Unless they’re getting added to a card that’s been open for significantly longer than anything they’ve ever had.
What if you have good credit and a number of old open credit cards already:
If i have open credit cards that go back 10 years. then I’d possible need a 20 year old card on my credit report to have some kind of impact on my score. But even then the score would possibly only increase 10-15 points in a good case scenario
Why applying for a new credit card by yourself doesn’t help as much
When you go apply for a new credti card, you’re starting from scratch. The new credit card does not have a history of on time montly payments. So you’ll slowly build history on that card, and it would generally take a few years for that card to build up a long history.
Exception to the rule is :
If you have some credit already built but no open credti cards, then opening up a new credit card will give you 10-15 points.
OR
If you have no open accounts and have no credit score. Then opening a new account will give you a credit score after 6 months.
How should one get added:
The original card holder needs to call the card company, tell them they want you added as “an authorized user.”
Make sure they give the card company:
your legal name (as it appears on the credit report)
your SSN and dob.
Now if the card comapny does not take down your SSN# , then that means that the card company won’t be reporting the account to your credit report.
Vast majority of companies report authorized user cards, but some may not.
DO NOT get added as a joint user, only get added as an authorized user. Since joint users are equally liable to pay the debt if the orignial card holder defaults.
When will the authorized user card show up on your credit ?
Short answer, generally 4-5 days after the next card statment comes out. Have the card holder check their last credit card statment to see the billing cycle end date.
Are there any negative impact on card the holder for adding your to their card:
No, there is ZERO risk to the card holder or their credit for adding you to their credit card. And even if you have a low score or negative accounts on your credit report the card holder is not affected by adding you. Bascailly you are importing some of their positive account history to your credit report, not the other way around.
Once you’re added, the original card holder will get the card mailed, and they can simply trash the card without activiating it and still the card will show up on your credit report.
Potential negative impact on you (if the card holder defaults or maxes out the card)
The only possible negative impact is if you used the card that was issued in your name and didn’t pay the balance and the card was closed due to non-payment. Then you may not be able to get off the card and this will also impact the original card holders credit.
In any scenario where you never used the card and the original card holder maxes out the card or defaults on it, then you can easily get the card removed off your credit. You or the card holder can call the card company to remove you off that credit card. The card company is legally bound to then remove the account from your credit.
As long as you’re not added as a joint user and merely an authorized user, you will not have problems if you don’t use the card and default on it.
If they don’t agree to remove you off the card, then you can use this credit bureau dispute letter to dispute the account with the credit bureaus.
What type of accounts can I get added to as an authorized user?
Practically any store credit cards card eg. Amazon credit card, Gap store credit card, or any credit card such as Capital One credit card or Citibak etc.
however here are the accounts you cannot get added to:
No debit cards,
No prepaid cards
No auto loans or installment loans (since they don’t allow authorized users)
Does the credit limit of the card you’re being added to matter
No the credit limit does not matter.
The card should generally be paid off every month, or have a balance not exceeding 10% of the limit.
What matters is the credit utilization and age of account
Generally balances on cards should be kept around 5%-10% of the entire credit limit. This is according to FICO Corporation, the institution that provides credit scores. A common myth is that he opportune utilization is 30% , which is incorrect.
For instance , a $1,000 limit credit card should not have more than a $50-100 balance , if it’ not paid off every month. However, a $10,000 card can have a $900 balance..
Getting on to a $20,000 authorized user card won’t give you a higher score increase than getting on to a $1,000 card. What factos into the score is how old the card is and what is the balance in relation to the credit limit.
So you’re far better off getting added to a 20 year old $500 limit credit card , rather than getting added to a 10 year old $10,000 limit card. Given they’re both close to a zero balance or have low utilization.
Do not purchase tradelines from companies that sell tradeline?
Firstly it is illegal to sell tradelines
Second they charge thousands of dollars and delete the tradeline shortly after its been added.
All they do is add you to someone’s credit card and charge you for it . And you have no idea who’s card it is and if they default, you’ll need to call the card company to get yourself off that card.
Lastly, you’re better off asking a spouse or relative.
