Becoming an Authorized User on Someone Else’s Credit Card Can No Longer Improve Your Credit Score

In an update made to the credit reporting systems by the credit agencies means that the you will no longer be able to enhance your credit score by being an authorized user on someone’s credit card. This will not change the way that the information is reported to the credit bureaus, nor does it mean that your credit history will stop showing the authorized account on your credit report. lenders will still be able to add you as authorized users on someone else’s card and it will still be reported on your credit report.

the effect that this will have on the credit scores of the people using authorized credit cards depends on a lot of factors which included the scoring system that has been used to calculate your score. VantageScore, for example, never considered the authorized user accounts in its considerations for calculating a credit score. Credit scoring models like the VantageScore that never included the authorized score in their calculation of the credit score will not be impacted at all.

For other credit scoring models that did consider authorized accounts, the degree of impact will be determined by how largely was your credit score impacted by the authorized account. For someone who has a strong credit history with other credit accounts and credit cards that have the history of regular payments, the impact of authorized accounts will be minimal, if at all. A credit score is calculated by giving weightage to individual elements in your credit report as well as in relation to each other. So how much a particular element, such as the authorized account in this case, is worth in terms of points depends upon what else is present in your credit history. So someone with a good string credit history with other credit accounts may not get impacted at all.

The people who will be impacted most are ones who have a history of late payments and even delinquent accounts with the authorized account being the only or one of the few positive elements being reported.

Also people who did not have their own individual credit accounts apart from being authorized users on another’s credit account will also get impacted since they will no longer have a credit account that will be considered in the credit score calculation.

The reason why a decision has been reached to stop considering authorized credit users in the credit score calculation is due to a practice called ‘piggybacking’. It was generally felt that this feature was being abused by many as to boost their credit rating unnaturally resulting in a credit score that was not accurately reflective of their credit worthiness. Not considering authorized users in the credit score calculations anymore will probably make the credit scores a more reliable and accurate measure of a consumer’s lending risk for the lenders.