Are Authorized-User Accounts Reported to All Three Bureaus?

Dear JST,

The credit reporting system is voluntary, which means lenders decide whether they want to report their accounts to the credit reporting agencies. While most major banks do report to all three credit bureaus—Experian, TransUnion and Equifax—some may choose to report to only one or two, and some may not report at all.

Even if a lender does report your account to Experian, there's no guarantee they'll also report your authorized user's information. But you can typically find out by contacting the card issuer before you add the authorized user to your account.

Can Being Added as an Authorized User Help Someone Build Credit?

Being an authorized user on an account can help a person start building their credit history, but only if the credit card company reports the authorized-user account to the national credit reporting companies.

An authorized user can make purchases using the account but isn't responsible for repaying the debt. Because of this, not all credit card companies choose to report their accounts to the authorized user's credit history.

If you want to add someone as an authorized user to your credit card to help them build their credit history, you should first contact your lender to make sure they report authorized-user accounts to the three major credit reporting agencies. If so, your positive payment history can help your friend or family member get started with credit. Keep in mind that credit scoring models may not weigh an authorized-user account as heavily as an individual or joint account where the cardholder is responsible for the debt.

Other Steps to Begin Establishing Credit

While being an authorized user may help, there are several other steps an individual can take to begin establishing their own credit history:

• Open a secured card. If you are unable to qualify for a traditional credit card on your own, consider opening a secured credit card account. With a secured credit card, you'll make an upfront security deposit and, in return, receive a credit card with a credit limit typically equal to the deposited amount. If you default on the card, meaning you stop paying your bill, the card issuer will close the account and keep your deposit—something that typically results in credit score harm. Because the lender can use the money you deposited to cover the debt if you fail to pay as agreed, these accounts are typically easier to qualify for.
• Ask someone to cosign. If you have a close family member with a strong credit history, you may be able to qualify for a small loan or credit card by asking them to cosign for you. Keep in mind that any late payments made on the account will show on both your credit report and your cosigner's report, so take extra care to ensure you are managing the account responsibly.
• Add your bills to your credit report with Experian Boost^®ø. With Experian Boost, you can add your on-time utility, cellphone or streaming service payments to your credit history. The process to add these payments is fast, easy and secure. You will receive a free updated Experian FICO^® Score^☉ at the end of the sign-up process.

Remember that the key to establishing a strong credit history is to make all payments on time and make sure that your credit card balances are kept low.

Payment history is the most important factor in your FICO^® Scores, and missing just one payment can have a substantially negative impact on your scores. Making every payment on time shows that you know how to manage your account responsibly and lets potential lenders know that you are likely to pay them on time as well.

Your credit utilization is the next most important factor in scores. High credit card balances may represent risk to your lenders because they increase your balance-to-limit ratio, or utilization ratio. An overall credit utilization ratio over 30% tends to have a more negative effect on credit scores, while keeping your utilization below 10% is ideal.

Thanks for asking.

Jennifer White, Consumer Education Specialist