Authorized User vs. Joint Credit Card: What’s the Better Way to Build Credit?

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The better your credit score, the easier it is to get approved for credit cards, car loans, mortgages and other types of credit. A higher score also means you’ll typically pay less in interest on what you borrow compared to someone whose score is at the lower end of the scale.

Before you can have a good credit score, however, you first need to have a good credit history. (If you don’t know your number, get your free credit score on Credit Sesame.) If you’re starting completely from scratch or you’re working on erasing past credit mistakes, there are two relatively easy ways to get the score you want. You can either get a joint credit card or ask someone to let you be an authorized user on their credit card.

At first glance, they may seem like the same thing but there are some important differences between the two.

What does it mean to be an authorized user?


An authorized user is someone who has charging privileges on another person’s credit card account. Most credit card companies allow cardholders to add authorized users as long as their account remains open and in good standing. For example, a parent could add her college-aged child to her account, or a husband could add his wife to his account. The credit card issuer does not check the authorized user’s credit.

When you’re an authorized user, you can make purchases with the card but you’re not responsible for paying the bill. The primary account holder is liable for all charges, regardless of who used their card to make them.

So how does being an authorized user affect your credit? It’s pretty simple. When a friend, family member or significant other adds you to their account, it effectively transplants the payment history for that account onto your credit report. Once it shows up on your report, the information for that account is factored into your credit score calculation.

If the primary cardholder has a solid track record of paying on time, that will work in your favor. For FICO scores, payment history makes up 35% of the calculation. FICO scores also factor in the age of the accounts on your credit report so if the person who’s granting you authorized user status has had the account for several years, that can also help.

Building credit with a joint credit card


A joint credit card operates on the same premise but it’s not exactly the same thing. When you fill out a joint credit card application, both you and the person who’s completing the application with you are subject to a credit check.

Next and most importantly, when you share a credit card with someone jointly, you’re both on the hook for the balance, regardless of who actually spent the money.

So how does a joint credit card build credit? When you apply for a card and open a joint account, it shows up on your credit report. The card’s balance and payments are reported to the credit bureaus on behalf of you and your joint cardholder. Paying on time can benefit both your scores. Late payments do the opposite.

It’s a good idea to keep the balance on a joint credit card low if you’re focused on improving your credit history. Thirty percent of your FICO credit score is based on the amount of debt you owe versus your overall credit limit. This is called your credit utilization ratio. Generally, lenders prefer to see this ratio at 30% or less so you should avoid maxing the card out.

How to get a joint credit card


If you’re wondering how to open a joint credit card account, it’s a pretty straightforward process. You find a card that you both like. Both of you fill out the application, the credit card company checks both credit files, and you’re either approved or denied.

The most challenging part is finding a card that’s going to work for both of you. For example, let’s say you’re newly married and you have a 620 FICO score, which would put you in the “poor” category. Your spouse, who has a 760 FICO score, has agreed to open a joint credit card account to try and improve your credit history.

With a score that high, he or she will qualify for just about any credit card out there. Many cards offer excellent benefits, but also come with an annual fee. If one person is not comfortable paying the fee, both people may have to settle for another card. Also, reward programs differ widely, so you’ll need to come to an agreement on that, too.

Tip: If you’re looking for the best joint credit card, visit Credit Sesame’s credit card marketplace to compare offers from top banks.

Are there downsides to being an authorized user or having a joint credit card?


While becoming an authorized user or opening a joint credit card account can benefit your credit score, there are some potential pitfalls to watch out for.

First, for example, your credit score can suffer if the primary cardholder doesn’t keep up with the payments or runs up a huge balance.

The same goes for joint cardholders. Worse, you have equal liability for the debt. If the relationship goes south and the other person decides not to pay, the credit card company can come after you for what’s owed. If you don’t pay up, the account could be sent to collections or you could be sued.

[Related: Credit Remedies You Need to Know About After a Divorce]

Before you sign up for that joint account or ask someone to make you an authorized user, be aware of the risk you’re taking on (or the risk you’re asking that person to take on). You could end up doing more harm than good to your credit score, or someone else’s, in the long run.

Rebecca Lake
Rebecca is a financial journalist from North Carolina. She has a Bachelors in Political Science from the University of South Carolina. She covers the intersection of public policy and personal finance.

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