Would becoming an authorized user on someone's account help me get approved for a car lease if that person has excellent credit?
Being an authorized user on an account that is always paid on time and has a low utilization rate could very well help you boost your credit scores, making it easier to qualify for that lease. How much being an authorized user on a positive account will help your credit scores depends on which score is being used by your lender.
As an authorized user, you can use the account to make purchases, but you are not responsible for making the payments. Some credit score formulas may weigh authorized user accounts more or less heavily than others.
Keep in mind, you don't get the benefit of the other person's entire credit history, only the authorized user account.
Contact Creditor to Ask If They Report Authorized User Accounts
While most do, not all creditors report authorized user accounts to the credit reporting companies. If you are being added to someone else's account for the sole purpose of building credit, contact the credit card provider first to ask whether they report their authorized user accounts.
Other Ways to Build Credit
Whether you are just starting out and trying to establish credit, or are trying to rebuild your credit after past difficulties, being added to an account as an authorized user is just one option. Other things to consider are:
- Opening a secured credit card account. With a secured card, you deposit funds into a savings account, and in return you receive a credit card with a credit limit that is a percentage of the deposited amount. Secured accounts are easier to qualify for because the amount you charge is secured by the money in the savings account. If you make all payments on time and keep your balance low, your lender may eventually convert the account to a traditional credit card account.
- Getting a cosigner. Asking a friend or family member with good credit to cosign for an account with you can help you qualify for a traditional account and build a stronger credit history. Keep in mind that a cosigner is equally responsible for the debt, so if you miss a payment or run up a high balance, both your and your cosigner's credit will be hurt.
- Having your rent payments reported. You can ask your landlord or apartment complex manager to have your positive rent payments reported to Experian. Adding positive rent payments can help improve credit scores, or enable a person to be scored for the first time.
- Signing up for Experian Boost. This new service offered by Experian is free and allows you to boost your credit scores by adding your on-time payments on utility bills.
For more tips on building your credit history and improving credit scores, visit our blog.
Thanks for asking,
Jennifer White, Consumer Education Specialist
This question came from a recent Periscope session we hosted.
Want to instantly increase your credit score? Experian Boost™ will be available in early 2019 and helps by giving you extra credit for the utility and mobile phone bills you're already paying. Until now, those payments did not positively impact your score.
This service will be completely free and can boost your credit score fast by using your own positive payment history. It can also help those with poor or limited credit situations. Other services such as credit repair may cost you up to thousands and only help remove inaccuracies from your credit report.