It is common practice now that people wanting to have nice credit or improve their earlier credit make the authorized user accounts on some relative’s credit card. For all practical purposes the authorized user is treated as the owner of the account. As much as the owner even the authorized user of the account can get a better credit rating.But there is also a risk that in case the owner defaults then it affects the rating of the authorized as well.
So the accounts of your father or mother on which you are the authorized user can affect your credit score. When you are an authorized user you will only be able to use your credit card. The card holder is authorized to receive the statements even while the card is in your name. Actually the card holder is due to make all the payments. You will have the freedom to use the card at any point in time. In case the original card owner makes some kind of delay while paying, it will not have any impact on your credit score.There can’t be a more protected choice one can have than this one.
One can have the highest credit score when being an authorized user for a efficient credit card account that is being paid in time.There will be a major problem when there is a default in the account bringing down the credit rating.The minute there is a default it hardly matters about the status of the authorized user at all.
It will be an altogether different scenario when the account holder gives the particulars as a joint account holder. The responsibility of the second account holder in this case is the same as the first account holder. There will be no trouble as long as the payments are being made well in time. But if the payments are delayed, you will eventually get a kind of hit on your report as being the joint card holder. Further, the collection agencies will then send you papers and notices and in case the original card holder files for bankruptcy, you will be held responsible to pay all the creditors. This bankruptcy will be on your credit score as well for a time period of about seven years.
Now when you do not need to have the authorized user account anymore, you can ask the original card holder to remove you from the authorized user list. The credit card issuer needs to be just telephoned to do this. To make sure that your name has been deleted you have to keep a watch on your credit score sheets for sometime to come. In case your name still appears you can deny being the authorized user and wait till it gets removed. You can approach any of the three credit bureaus to get a free report quite easily. Find more information on authorized user.
Write a Comment