Ever thought about boosting your credit score easily without getting new credit? Many Americans are looking for ways to improve their credit scores. Becoming an authorized user on a credit card is a surprisingly effective method. Yet, only 19.1% of people use it.
So, how does it work, and how fast can you see results? Let’s explore how much and how quick your score can increase as an authorized user.
Key Takeaways
- An average credit score of 661 for authorized users compared to 657 for non-members highlights the potential benefits of this method.
- Individuals with credit scores below 550 saw a 10% rise within 30 days and up to 30% after 12 months.
- Becoming an authorized user can lead to a rapid credit score increase and improved credit utilization.
- This technique can help establish credit history, especially for younger individuals or those with limited credit experience.
- Parents can aid their children in establishing credit early by adding them as authorized users.
Understanding Authorized User Status
Becoming an authorized user can help improve your credit score. It lets you use someone else’s good credit history for your benefit. But, it’s key to know the details before using this strategy.
What is an Authorized User?
An authorized user is someone added to a main cardholder’s account. They can buy things but don’t have to pay for them. Big credit companies like American Express let kids as young as 13 or 15 be added.
The main cardholder controls the account, including the credit line and rewards. Recent data shows that authorized user actions must be reported to credit bureaus. This can affect your credit score in as little as 30 days.
Role and Responsibilities
The main job of an authorized user is to use the primary cardholder’s good payment history. Payment history is a big part of your FICO® Score, making on-time payments very important. Adding someone with a high credit limit and low balance can also help your score.
It’s important to talk to the main cardholder about spending limits and possible fees. Authorized users should keep an eye on their credit scores and plan to become primary cardholders later. Remember, the main cardholder’s actions can affect your credit report, whether they’re good or bad.
Removing yourself as an authorized user can also impact your score, especially if it’s the oldest account. The length of your account history is a big part of your FICO® Score. It’s vital to watch the main cardholder’s credit habits and ensure they have a strong history. Also, check your credit reports from all three bureaus to use the authorized user strategy effectively.
Benefits of Becoming an Authorized User
When I became an authorized user on a credit card, I wanted to see quick improvements. Many people aim for this status to boost their credit fast. It’s a way to quickly improve your financial health.
Immediate Credit Score Boost
Being an authorized user can quickly raise your credit score. Almost half of users see their score jump to 680 or higher, which is good. This can happen in just 30 to 45 days, making it a fast way to improve your score.
Improving Credit Utilization
Credit utilization is key to your score. It’s best to keep it under 30%. By being an authorized user on a high-limit, low-balance account, I lowered my utilization. This helped my score, showing lenders I’m a reliable borrower.
Establishing Credit History
For those with little or no credit, being an authorized user is a big help. The account’s age and good payment history add to your report. It takes at least six months of activity to start a credit score from scratch. This new history opens doors for future credit applications.
In summary, becoming an authorized user offers many benefits. It can quickly boost your credit, improve your score, and lower your utilization. Just remember, the primary account must be managed well for it to positively affect your report.
Factors Influencing How Much Your Score Can Increase
Several credit score factors affect how much your score can go up as an authorized user. Your existing credit history is key. A detailed credit history analysis shows how long you’ve had credit and any debts. These factors greatly influence your score boost.
The payment history of the primary account holder is crucial. Late payments have a big impact on your score. So, it’s important for the primary account holder to pay on time.
Credit utilization ratio is also important. Try to keep your credit utilization under 30%. This can help improve your score. Older credit card accounts are good because they show a long credit history.
Experian doesn’t report negative payment history for authorized users, but Equifax and TransUnion might. So, managing debt well is key for both the user and the primary account holder.
Other factors like the mix of credit types, hard inquiries, and credit report management also affect your score. Looking at these credit score factors helps improve your credit through a detailed credit history analysis.
In short, being an authorized user can quickly boost your score, often in 30 to 45 days. But, both parties need to manage debt well for real improvements.
How Quick Can You Expect a Score Increase?
When you’re added as an authorized user, you might wonder about the speed at which you’ll see a credit score increase. The credit score timeline can vary significantly depending on several factors.
Typical Timeframes
Typically, becoming an authorized user may lead to changes in your credit score within a few months. According to Credit Sesame and Nerdwallet, it takes about 30 days for those with credit ratings below 550 to see a 10% increase. Those with higher scores might see slower progress.
For example,
- Individuals with scores below 550 increased their scores by 10% within 30 days and 30% after a year.
- Those with a credit score above 700 saw around a 3.5% boost in the first month.
- People with excellent scores above 800 experienced only a 1% improvement.
In addition to the credit score timeline, you must consider continuous credit activity. Consistent positive behavior, like timely payments, influences your score significantly.
Impact of the Primary User’s Credit
The primary user’s credit impact plays a pivotal role. Your credit benefits hinge on the primary user’s spending habits, payment history, and overall credit management. If they maintain a low credit utilization ratio and pay bills punctually, these behaviors reflect positively on your credit. According to Experian, after three to six months of maintained activity, you can establish a solid credit score.
Conversely, if the primary user has late payments or high credit utilization, it can negatively impact the authorized user’s credit effect. Hence, choose a primary user who exemplifies excellent credit habits, which will benefit your score building endeavor.
how much how quick score increase authorized user
Getting your credit score up fast as an authorized user depends on a few things. These include the main user’s credit habits and your starting credit score. Credit Sesame’s data shows that people with lower scores often see big improvements.
A study of 2000 people found that scores below 550 can jump by 10% in 30 days. After a year, scores can go up by 30%. This method is great for those with bad credit scores who want to fix their credit fast.
Tiffany from Credit Sesame saw her score go up by 25 points in three months. This happens when you’re added to a responsible family member’s account. It’s a common way to start building a good credit history.
Also, FICO scores vary by age, with Gen Z at 680 and Baby Boomers at 745, Experian reports. This means that as you get older and use credit wisely, your score can go up. Being an authorized user can help younger people get started on the right track sooner.
Credit Sesame’s 2018 study found that fair credit scores can increase by about 11% in three months. The main user’s good credit habits are key here.
So, using the authorized user method can be very effective. It works best with strong accounts and regular payments. This approach, as seen in Credit Sesame and Tidal Loans, is good for those serious about improving their credit scores.
Conclusion
Improving your credit score as an authorized user is a journey with many steps. Adding someone to a credit card can quickly boost your score. A survey found that 46% of those added as authorized users scored 680 or higher, up from 27% without this status.
One person’s score even jumped over 100 points in just two months. Experts suggest using cards from Barclays, Chase, Capital One, and Discover for this strategy. It usually takes 30 to 60 days for the authorized user status to show up on your report.
In this time, the impact can be huge, especially if the main cardholder pays on time and keeps balances low. Some people have gone from no credit score to 710 in under a month.
Being an authorized user is a great way to build or fix your credit, but it’s not without its duties. It’s key to watch your credit reports closely. Missed payments and high balances can hurt both your scores.
By managing your accounts wisely, you can see your score improve in as little as six months. Tidal Loans LLC has provided this guide. For more on improving your credit, call us at 832-757-1262 or email info@www.tidalloans.com. With the right steps, boosting your credit score as an authorized user is within reach, setting a strong financial base for your future.
