Your score may drop a bit when you are removed as an authorized user, but you can improve it over time by using your own credit accounts responsibly.
Build History on Your Own Card: It is advisable to wait until your own credit card has a longer history before removing yourself as an authorized user. A good rule of thumb is to wait at least 6 to 12 months. This will allow your new card to establish a payment history and contribute positively to your credit score.
Disadvantages of being an authorized user
Limited access: Authorized users can be removed at any time, and they cannot use all of the benefits of the card. For instance, they cannot earn their own credit card rewards points and typically are not authorized to redeem them.
Schulz also notes that when primary cardholders remove an authorized user on their card, the primary cardholder's credit history will no longer influence the authorized user's credit history.
The process of removing an authorized user is simple and can be done by calling the credit card issuer or sending a letter. There are risks involved in being an authorized user, such as negative financial behavior of the primary cardholder impacting your credit score.
Being removed as a cosigner from a loan could potentially hurt your credit scores. How much your scores are impacted depends on the details of your credit profile.
If there's a history of late or missed payments on the account you've been added to, or if that account has a balance that exceeds about 30% of its credit limit, it will tend to lower the credit scores of the primary account holder—and potentially yours, as an authorized user.
With responsible card use and on time payments, your positive credit score may be able to help your Authorized User to build their credit. For more tips, our CreditWise app can help them access and understand their credit score—whether they're a cardholder or not.
Adding an authorized user to your credit card account alone shouldn't have a negative impact on your credit. But keep in mind that if that person uses your credit in a way that hurts your financial situation, negative credit impact could follow.
If you discover the primary cardholder isn't making on-time bill payments, you may decide that cutting ties is the best way to go. Call the issuer and ask to have your name removed as an authorized user. It should take only a few days, and the issuer will cease making reports under your name to credit bureaus.
With a joint account, both people can make purchases, and both are fully responsible for the bill; with an authorized user setup, both can make purchases, but only one is legally liable for paying.
There are some differences around how the various data elements on a credit report factor into the score calculations. Although credit scoring models vary, generally, credit scores from 660 to 724 are considered good; 725 to 759 are considered very good; and 760 and up are considered excellent.
A joint cardholder can only be removed with an issuer's permission. Authorized users can be removed at any time by the primary cardholder.
A 2018 Credit Sesame survey found that people with bad credit who were added as authorized users saw a 24% increase in their FICO Score in 6 months and a 30% increase in 12 months. The lower your starting credit score, the more you benefit from being an authorized user.
Overall, Credit Karma may produce a different result than one or more of the three major credit bureaus directly. The slight differences in calculations between FICO and VantageScore can lead to significant variances in credit scores, making Credit Karma less accurate than most may appreciate.
Will removing an authorized user hurt their credit? It depends on the situation. If the card in question has been well maintained with on-time payments and low credit utilization, removing the authorized user from the account will effectively erase that positive payment history from their credit report.
Authorized user accounts must show up on your credit report to affect your credit score. As for how long it takes for authorized users to show on credit report, you might see your score change as soon as the lender starts reporting that information to the credit bureaus, which can take as little as 30 days.
Yes, authorized users can enjoy access to Capital One Lounges and Priority Pass lounges. No, this credit is only extended to the cardholder. No, only primary cardholders receive the credit, but authorized user purchases can count toward it.
Your credit score can drop for a number of reasons, including a recent late or missed payment, an application for new credit or a change to your credit limit or usage. To understand why your credit may have gone down, it's important to understand what affects your credit scores.
Being an authorized user can have a positive or negative effect on your credit, depending on how the credit card is used. On-time payments and low credit utilization can help an authorized user build credit, but late or missed payments on the card can hurt their credit.
You can often remove a cosigner at any point during the loan period. Your loan paperwork might dictate specific terms, though. For example, some lenders require 24 months of on-time payments from the primary borrower before they'll consider releasing the cosigner.
You're generally able to remove yourself as an authorized user by calling the credit card issuer and requesting the change. You may also be able to ask to remove yourself from the account online, depending on the company.
The best lenders consider the credit scores of both borrowers when co-signing an auto or other type of personal loan. If you have a lower credit score, having a co-signer with a higher score could work in your favor. In terms of which credit-scoring model is used for approvals, that can vary by lender.