Finance term
Authorized User
Also known as: AU, credit card authorized user, added user
Definition
A person added to another's credit account who can make purchases but is not legally liable for the debt—a strategy used to build credit history by piggybacking on a primary cardholder's positive tradeline.
Detailed explanation
An authorized user (AU) is someone granted access to a credit card or line of credit by the primary account holder. The AU receives a card, can make charges, but has no legal repayment obligation—only the primary cardholder is contractually liable. Because many card issuers report the account to all three major bureaus under both the primary cardholder's and the AU's Social Security numbers, the AU inherits the account's full payment history, credit limit, and age on their own credit report.
This mechanism—often called credit piggybacking—is a legitimate credit-building tool explicitly recognized by the Fair Credit Reporting Act (15 U.S.C. §1681) (https://www.ftc.gov/legal-library/browse/statutes/fair-credit-reporting-act). Parents commonly add children as AUs to help establish credit history before the child is old enough to qualify independently. Spouses use it to transfer credit strength to a thin-file partner. Some third-party services sell AU slots commercially, a practice the CFPB has scrutinized but has not prohibited (https://www.consumerfinance.gov/data-research/research-reports/authorized-user-tradelines/).
Impact on credit scores: - If the underlying account has a long history, low utilization, and no late payments, being added as an AU can meaningfully improve the AU's FICO score. - FICO 8 and earlier give full weight to AU tradelines. FICO 9, FICO 10, and recent VantageScore versions have reduced or conditioned the weight given to AU accounts to combat piggybacking-for-profit schemes. - Being removed as an AU causes the tradeline to disappear from the AU's report, potentially lowering their score if it was providing significant history or limit.
For small business financing, a borrower who is a thin-file AU on a parent's old, high-limit card may show inflated personal credit scores that lenders will scrutinize more carefully when reviewing the full credit profile.
◈ Worked example
- A college student is added as an AU on her parent's 15-year-old Visa with a $20,000 limit and zero balance; her FICO score jumps 85 points within 60 days.
- A small business applicant's 760 FICO score relies heavily on three AU tradelines; after reviewing the profile, the underwriter requests two years of personal tax returns to verify independent financial responsibility.
Common questions
The most-asked questions about Authorized User — answered straightforwardly.
Does being an authorized user build credit? +
Yes, if the primary account reports to the bureaus for AUs (most major card issuers do) and has a positive history. The impact diminishes in newer FICO and VantageScore models designed to down-weight piggybacking.
Can an authorized user hurt my credit? +
If the primary cardholder misses payments or maxes out the card, those negatives also appear on your report. You can request removal as an AU at any time, which removes the tradeline—helpful if it's gone negative.
Is there a risk to adding someone as an authorized user? +
Yes—the primary cardholder is fully liable for any charges the AU makes. The AU has no legal repayment duty, so the primary must pay any balance the AU runs up.
Further reading
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