Risk and reward when adding brother as an account holder

Dear Experian,

I have good credit. My brother’s credit is bad due to the recession and losing his job. I am letting him use my credit card, which he is paying on time. What would happen to my credit scores if I added his name and info to my credit card? What would happen to his credit scores?



Dear LMT,

Adding your brother as a joint account holder or authorized user can help his credit history, but not without some risk to you if you depend on him to make the payments.

If you add your brother as a joint account holder, your credit card and its associated payment history will appear in his credit history, as well as yours. As a joint account holder, he would share equal responsibility for the debt, and so the account history would affect his credit report just as it would yours.

That means that on-time payments would appear on both your credit report and his. But the same is true for late payments.

A positive history on the joint account would have a positive effect on his credit scores and yours. A poor history could hurt credit scores for both of you.

As an authorized user on the account, your brother would have no responsibility for the debt, but could make charges with the account as he desired. Because authorized users have no responsibility for the debt, not all credit scoring systems included authorized user accounts in the calculation, so it may or may not help his credit scores.

The risk to you is how your brother will use the account. If he charges to the limit, it could leave you footing the bill for a debt you didn’t create. High balances as compared to limits are also a sign of credit risk, so you could find yourself with damaged credit scores even if you are able to make payments on time.

The question is whether you trust your brother to manage the account well. If you are confident that he will not abuse the relationship and will maintain open communications about how he and you are using the card, you can add him as a joint account holder or authorized user.

If you have any doubts, don’t. Adding someone as a joint account holder is a very serious decision, and can affect personal relationships when a family member is involved.

Thanks for asking.

- The “Ask Experian” team

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