Authorize this!
February 26, 2010 11:44 PM   Subscribe

Will it help my boyfriend's credit if I add him as an "authorized user" on my credit card? I have fantastic credit.

Here's the thing. My boyfriend is currently in a no-credit (NOT bad-credit) situation. I have great credit. He went to go apply for a credit card through his bank and was turned down, unless he had a co-signer. He came to me, and I said, well, maybe I'll co-sign for you, but first let's see if there's anything else we can do. It turned out, or so the Internet said, that all I had to do was add him as an "authorized user" to the credit card that I already had, and then every time I made a payment it would bump up his credit, etc, you see where I'm going with this. I didn't really feel comfortable doing that until I knew more. My credit card exists, I won't deny that. However, I've never once missed a payment or made less than the minimum payment in 7 years that I've had this card. I am now in a position to start seriously paying it off. IS it a good idea for him to be an A/U on this account? Is it a good idea for me? I've gotten such a huge range of answers by googling this question! I know YANMA (you are not my accountant), but does anyone have any prior experience with trying this? Will it help him? Will it hurt either one of us? Thanks!
posted by lucky25 to Work & Money (32 answers total) 1 user marked this as a favorite
It is not at all a good idea to add someone to your credit card account.

There are restrictions on what they can do, but if you have a secondary cardholder and they charge on it, you will, as the primary cardholder, be responsible for all the purchases if he fails to pay. Generally speaking, there is no way to limit the amount he can charge, either. So if he goes out one day and decides to charge your entire available line of credit, then refuses to pay, you are stuck with it.

I strongly recommend that no one add people to their cards, even if they're in committed relationships. Credit has become too important to risk it that way.
posted by winna at 11:48 PM on February 26, 2010 [1 favorite]

Response by poster: I totally agree with Winna and would never grant someone free access to my credit even if I had been born from the same womb as them. What I mean is adding him as an "authorized user" and he never gets a card, or has actual access ever in any way. That would not happen. What I mean is, if I add his name to my account, give him no power over it in any way, and pay the bills - will that help his credit?
posted by lucky25 at 11:54 PM on February 26, 2010

Check your specific card and find out what "authorized user" actually means. And "authorized user" has a lot more power over an account than what your assuming based on your most recent response.
posted by amyms at 12:01 AM on February 27, 2010

According to an article on Consumerist, "piggy backing" your boyfriend it won't help his credit score.
posted by QueenHawkeye at 12:03 AM on February 27, 2010 [1 favorite]

i sympathize with not having credit. it's totally lame. but please don't co-sign or add him to your card. have him get a pre-paid credit card account, charge something like gas to it, pay off the balance as soon as it comes due. look for one that doesn't have an application fee and that will switch to a non secured card after 12-18 months. also find out if any of his utilities can report to the credit agencies. it's a long road, but one he can go down on his own.
posted by nadawi at 12:12 AM on February 27, 2010 [1 favorite]

I am pretty sure this won't really help his credit. We were in a similar situation when I added my boyfriend as an authorized user so he'd have a way to get rental cars, etc. When it came time to apply for a mortgage together, we were told that he still had no credit score. Things might have changed since then, and this was an Amex, not a Visa/Mastercard so the rules may be different.
posted by cabingirl at 1:18 AM on February 27, 2010

If you want to help him, something that's far more limited seems like a sounder idea, like guarantor on a small hire purchase or somesuch; that limits your own exposure.
posted by rodgerd at 1:38 AM on February 27, 2010

I doubt that it will make any difference at all. I have a couple of my parent's credit cards in my name, and the bank never asked for any of my identifying information (ID, SSN, address) when they issued them. The accounts do not appear anywhere on my credit reports.
posted by halogen at 1:48 AM on February 27, 2010

One Amex, one Visa.
posted by halogen at 1:49 AM on February 27, 2010

I had never taken a loan and eschewed credit cards most of my life, until I realized about a year and a half ago that it was time to start building the credit score that I would need down the road if I ever wanted a mortgage or auto loan. I applied for and was denied for regular credit cards, so I got a secured credit card through my credit union.

It had a limit of $600 and was tied to my savings account, which meant that I just needed to keep that amount in my savings account (I continued to earn interest on it). I read somewhere on the internet that keeping the balance less than 30% (or better yet, less than 10%) helped my credit build faster (I don't know if this is true), so I would just buy a sandwich with it once a month and pay it off right away.

A year later, I called up my credit union and asked them to switch it to a regular credit card with a limit of $1000, and they did. In the grand scheme of things a year isn't that long. So if this experience is any example, it may be relatively easy for your boyfriend to build his own credit via a secured credit card.
posted by kprincehouse at 2:06 AM on February 27, 2010 [3 favorites]

My husband added me as an authorized user to his credit card and it has not shown up on my credit report. I've always treated my husband's card as sacrosanct- tied with rent/mortgage for status of "these are paid every month, no question, no deviations, ever." So for anyone else who might have a similar question about adding an authorized user, I just want to say that it's not always a terrible idea (obviously, depending on the level of trust/responsibility in your relationship).
posted by banjo_and_the_pork at 4:56 AM on February 27, 2010

It won't help his credit, but it might hurt yours. Good on you fir wanting to help, but the place for him to start is with a secured credit card. Get one of those and pay in full every month, and he'll be on his way. You could help him find a good one and help with the initial deposit if you want.
posted by spilon at 5:57 AM on February 27, 2010 [1 favorite]

Your boyfriend's lack of credit is not your problem; this is a situation for him to research and fix. As other's have noted, a secured credit card is his best bet as a first step...but this is work for him to do, not you.
posted by BostonTerrier at 6:41 AM on February 27, 2010 [5 favorites]

Best answer: I totally agree with Winna and would never grant someone free access to my credit even if I had been born from the same womb as them. What I mean is adding him as an "authorized user" and he never gets a card, or has actual access ever in any way.

I don't think you understand what "authorized user" means. They send him a card in the mail and he can use it to charge stuff to your account, just as you would. Additionally, since he's not actually the account holder, the payments you make will have little, if any, affect on his credit score.

This is probably a bad idea.
posted by chrisamiller at 7:06 AM on February 27, 2010 [2 favorites]

He might also have better luck applying for a store or gas station card. They'll pretty much accept anyone, and if paid on time, these are good first-step credit builders.

About 15 years ago, a girlfriend added me to her credit card, and it's been a bit of a hassle ever since. My credit then was also nonexistent, but she didn't do it to help me build credit. I'd used her card in an emergency to pay for a major car repair, and she wanted it to be easier for me to directly pay it back by having access to the billing.

As it happened, being on her card had no effect on my credit rating. In the next few years, I got a secured card or two, financed a used car, and slowly built up to a pretty standard American lifestyle (mortgage, etc.).

But in those intervening years, every time I've applied for credit for a major purchase (car, house), I'm asked to explain why there's an existing, unused credit card account with available credit of $10,000. Even though the card hasn't had a balance in more than a decade, and even though I've had other credit cards that I've actually used and paid off repeatedly, this one still shows up on my credit as a risk point. Basically, lenders see it as a place where I have the potential to get in big debt trouble.

I'm still in contact with the old girlfriend, and get this: she canceled that card years ago. It's no longer on her credit, but it is on mine. I tried once to call the credit card company and explain, but eventually got put on perma-hold, and have never had the gumption to try again, though I know I should. And Experian once told me I'd need a letter from the credit card company to get it off my credit report. Yeesh.

tl,dr: don't do it,'ll haunt you both!
posted by M.C. Lo-Carb! at 7:10 AM on February 27, 2010

they said no to him for a reason. he'll be okay.
posted by elle.jeezy at 7:39 AM on February 27, 2010 [1 favorite]

QueenHawkeye's link pretty much sums it up: FICO 08 changed the way credit scores are tabulated so that "piggybacking" or adding someone to a card as an authorized user will no longer boost their credit score.

M.C. Lo-Carb, the Fair Credit Reporting Act (see pages 46-50) affords you certain protections, including the right to demand that inaccurate information be removed from your report:

"(5) Treatment of Inaccurate or Unverifiable Information
In general. If, after any reinvestigation under paragraph (1) of any information disputed by a consumer, an item of the information is found to be inaccurate or incomplete or cannot be verified, the consumer reporting agency shall–
(i) promptly delete that item of information from the file of the consumer, or modify that item of information, as appropriate, based on the results of the reinvestigation; and
(ii) promptly notify the furnisher of that information that the information has been modified or deleted from the file of the consumer."

Instead of calling, write to each of the credit agencies and tell them that you want that inaccurate information removed. By law they're required to investigate it and if the company reporting the inaccurate info can't provide (timely) proof that it is correct, they have to remove it.
posted by LuckySeven~ at 7:49 AM on February 27, 2010

This previous thread addresses some of the problems with authorized users. If things did go sour, it's not impossible for him to obtain a card without your permission (since he is authorized and all).
posted by parkerjackson at 8:12 AM on February 27, 2010

Adding someone as an authorized user is different than adding someone as a joint cardholder.

Authorized users have the ability to use that particular line of credit legally, but have NO financial responsibility, and therefore, any activity on the card, good or bad, does not affect their credit in any way.

Keep in mind that authorized users can still legitimately use the credit line in any way, whether or not they have a card themselves. You don't need a card in your possession to shop online if you have all the information already :P
posted by Verdandi at 8:14 AM on February 27, 2010

You have excellent credit. Did anyone have to add you as an authorized user? No. You built your credit by using credit responsibly. Your boyfriend should do the same.
posted by 26.2 at 8:49 AM on February 27, 2010

I moved here from overseas and had no credit. Got a credit card which had a $300 deposit against it, used and paid off the card regularly, got offered another card with a $500 limit, used and paid off regularly and now I have an excellent credit rating. Took a few years, but it was worth it, esp in the US where credit rating is king.

Financial responsibility in a partner is a Good Thing - agree with the above answers that this is his issue to resolve.
posted by poissonrouge at 9:09 AM on February 27, 2010

Money Mart will issue a Master Card with a $200-$250 limit with no or bad credit..the interest is high but as the limit is so low it's hard to get into too much trouble..they take a payment automatically so you have to have the monthly payment in your bank account but it will get him started as it does show on your credit rating.

That's in Ontario anyway.
posted by Weaslegirl at 9:11 AM on February 27, 2010

I think people may be missing your statement that he has no credit, rather than bad credit.

Anyway, my mother added me to her credit card account when I was a teenager (and had no credit), with a card I essentially never used. That account shows up on my credit reports just like my own credit cards, and it shows up as having been open for the umpteen years my mom has had her card with that company. (I guess she never took me off the account.)

But I would heartily nth people's comments about being very careful about what rights this gives your boyfriend, in terms of the account. Even if you cut up the card, he may be able to call and have them send a new one, change the address, etc.
posted by needs more cowbell at 9:19 AM on February 27, 2010

Don't do this. You trust him, maybe you love each other, but it's a potentially huge problem. Plenty of questions about what to do when the significant other rings up a bunch of credit card debt. If nothing else, it creates an imbalance in the relationship because you're taking some financial responsibility for him.
posted by theora55 at 9:42 AM on February 27, 2010

My husband is an authorized user on my credit card, which we use for household purchases and utilities and pay in full every month. We use this card (rather than a new joint card) this way because I have excellent credit card rewards, which we're able to rack up pretty quickly. However, since he's only an authorized user, it doesn't show up on his credit report.

It's improved my credit, though.
posted by PhoBWanKenobi at 11:04 AM on February 27, 2010

If your purpose in adding him as an authorized user is to let him establish credit, or help his credit - don't. You may as well sacrifice a chicken. It will do absolutely NOTHING for his credit. Case closed.

However he can have an impact on your credit. It can be bad, obviously, if he charges up a storm and fails to pay - you'll be responsible. But, it can also be bad even if he doesn't behave irresponsibly - because your utilization rate will go up, and this is the second most important criterion in FICA scores. And here's the killer - your utilization rate can go up even if you pay off your card every month, if it so happens that the reporting is done (and it frequently is), before you pay off your card for the month - at that moment, the still not as yet paid off charge will count toward your utilization rate.

Bottom line - horrible idea. Doesn't help him one whit, and might hurt you badly.
posted by VikingSword at 11:19 AM on February 27, 2010 [2 favorites]

I say you don't do it but for different reasons.

1. You have a credit card, he doesn't.
2. He has no credit card debt, you DO have debt.

If its possible for you to "bump up" his score due to your fiscal responsibility, then its logical to assume that any future fiscal irresponsibility on your part will "bump down" his score.

Are you even sure you have a good credit score having debt, paying only the minimum balance, and now after a few years starting to pay down the debt? I'm not trying to be mean or insulting, I just don't know and am assuming that someone in your situation doesn't have the best credit score...or even better than someone who doesn't have any credit.

Don't do it...for his benefit...not necessarily yours.

Tell him to sign up for a debit card for free at any bank and use it like a credit card (except that it takes money out of his checking account). If you really want to help him out, find out what bills he can have in his name (phone, mobile, utilities, cable, etc) and have him earn a better credit score that way.
posted by hal_c_on at 12:35 PM on February 27, 2010

Response by poster: Thank you so much, everyone! You've given me a lot to think about and some good reading material, and i appreciate the help. I thought this sounded like an easy fix at first, and don't have any worries about his trustworthiness....but then again, famous last words, right? :)
posted by lucky25 at 4:13 PM on February 27, 2010

The risk to you aside, being an authorized user on someone else's card will not give him any credit history.
posted by Sallyfur at 5:03 PM on February 27, 2010

Does he any money in the bank? If he does, he can get a small personal loan from his own bank for whatever (bed frame, cheap car, doesn't matter he doesn't have to actually buy something with the money), use the money in the account as collateral, pay back the loan on time and thus establish some credit history.

I did something similar back in the day. Took out a personal loan to buy a car but used the car as collateral for the loan.

Getting credit is not difficult but it does take time to build.
posted by eatcake at 5:51 PM on February 27, 2010

This used to work but no longer does. Instead, he should get a secured credit card to establish a credit history. Within a year, he should be getting offers for unsecured credit cards.
posted by evariste at 6:24 PM on February 27, 2010

I agree with Viking Sword. I worked for a summer for a large US credit card company. Adding your boyfriend as an authorized user will not benefit him while adding risk for you. Authorized users have no power over the account and your account is not linked to him in any way to impact his credit history.
posted by seesom at 7:57 PM on February 27, 2010

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