Credit Advice

Authorized users and credit scores

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Credit Advice

Authorized users and credit scores

Dear Experian,

In a previous question, you stated that authorized users will no longer benefit from being on someone else's credit card etc. Does this mean that our scores will potentially decline? For instance, I am an authorized user on my husband’s credit card, and it is reported on my report. Will this be completely taken off, and when? Will this not only hinder me from gaining points, but hurt me substantially as well?

- DOW

Dear DOW,

The way authorized user accounts are reported is not going to change on Experian credit reports. The change is going to be in the way credit scoring systems treat authorized user accounts that are in your credit report.

Lenders will still be able to add people to accounts as authorized users, and the accounts will still appear as such on credit reports. If you get your credit report, you won’t see any difference.

Because of the wave of “piggybacking” schemes that are aimed at falsely influencing credit scores, the companies that develop credit scores are changing their systems so that they no longer score authorized user accounts.

The impact of these changes on your credit scores depends on the scoring system and your overall credit history.

Some scoring systems, such as the VantageScore, have never included authorized user accounts in the calculation. Those systems will not be affected at all.

Credit scores from systems that did include authorized user accounts might be affected negatively to some degree. But, if you have a strong credit history, there may be not impact at all, or to such a small degree that it will not affect your ability to get the credit you want at the best terms.

That is because the number of points any element in your credit report is worth depends on your overall credit history. In other words, an authorized user account isn’t always worth the same number of points.

If your credit history is very good, an authorized user account might not help your credit scores at all. On the other hand, if you have serious problems, such as late payments that make you a marginal credit risk, an authorized user account with a positive payment history could help your credit scores.

Consumers who are in that situation will be most affected by changes to credit scoring systems that result in authorized user accounts no longer being considered in the calculation.

In some ways, the changes that are being made may help credit scores become more consistent because authorized user accounts will be treated the same way in all of them.

Thanks for asking.

- The "Ask Experian" team

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