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attrapereves
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Postby attrapereves » Tue Jul 08, 2014 8:36 pm

When adding someone as an authorized user on an account (for companies that report to the credit bureaus), does this have essentially the same effect as having a credit card in your own name?


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Postby MemberSince99 » Wed Jul 09, 2014 6:26 am

Generally as long as it reports to the bureaus, yes. It's a positive trade line and it will boost your score.


What it means specifically to lenders I don't know. Or care. But yes it will help if it's done right.

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Postby mdl28 » Wed Jul 09, 2014 8:02 am

If you provide the lender with the users SS #, yes it will report. That will turn them into as much of a card holder as you are, which means you will both share the responsibility in paying it back and getting the credit impact. Which will be a positive or negative, depending how you use it.
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Postby takeshi » Wed Jul 09, 2014 9:46 am

attrapereves wrote:does this have essentially the same effect as having a credit card in your own name?

You'd have to clarify exactly what you're asking. In some ways it is. In some ways it is not. One difference is that not all creditors consider accounts where one is an AU when making an approval decision.

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Terry
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Postby Terry » Wed Jul 09, 2014 11:24 am

mdl28 wrote:If you provide the lender with the users SS #, yes it will report. That will turn them into as much of a card holder as you are, which means you will both share the responsibility in paying it back and getting the credit impact. Which will be a positive or negative, depending how you use it.


Regardless of whether a SS# is provided, an authorized user is not legally responsible for repayment - only the account hold is responsible. The only time a second party is responsible for repayment is when he/she is a co-applicant.
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Postby mdl28 » Wed Jul 09, 2014 12:56 pm

Terry wrote:Regardless of whether a SS# is provided, an authorized user is not legally responsible for repayment - only the account hold is responsible. The only time a second party is responsible for repayment is when he/she is a co-applicant.


Agreed to a point. However, companies like Chase bank allows you to have an authorized user without an application, sure. But if you want them to report that user to the bureaus and have them be liable as much you the card holder are. You must have the authorized user fill the proper forms that Chase supplies. And they must be approved. Otherwise, the authorized user is just using the card at your cost. They become a co-signer, once Chase approves the current user.

There are different situations across the board of course, but this is from personal experience with Chase.
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Postby flan » Wed Jul 09, 2014 9:05 pm

MemberSince99 wrote:Generally as long as it reports to the bureaus, yes. It's a positive trade line and it will boost your score.


What it means specifically to lenders I don't know. Or care. But yes it will help if it's done right.


There's a flag in the report that marks the AU as a not-responsible party, but they do show up in the stock FICO reports. Lots of lenders don't care about them as there's a long history of people abusing them, and doing things like transferring the ownership of accounts to someone, so they get the benefit of the long history. The one thing that AU accounts still are useful for is someone who has no other history: six months as a (reported) AU, and they'll have a fico score.



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