Adding significant other as authorized user

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kcm7
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Adding significant other as authorized user

Postby kcm7 » Fri Oct 31, 2014 9:40 am

My boyfriend is getting serious about his credit. Basically, he just has a thin history (never had a credit card) with student loans only (and not a perfect payment record on those).

He got a mailed offer for the Discover it and was rejected when he applied, so it looks like he'd need to go the secured card route.

But I was thinking -- I could just add him as an authorized user to my account. He has agreed to just shred his card and never use it. So he'd just float along on my account for a year or so until his credit is good enough to the point where he can apply for a decent, bare bones, no-annual-fee card and skip the Credit One/Cap One secured step.

But that just seems too easy. Is there anything I'm not taking into account?

I'm not worried about him doing something irresponsible (like I said, he'd never use the card), and it would be super easy for me to remove him whenever. I'm mostly wondering if this would really work credit-building-wise for him.
Cards:

-Capital One Quicksilver
-Barclaycard Arrival (no AF)
- US Bank (no rewards)
-IHG


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CarefulBuilder14
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Postby CarefulBuilder14 » Fri Oct 31, 2014 11:00 am

I know the benefit to one's FICO score of being an AU is smaller than it used to be. So it will help him, but only slightly.

Better than Cap One or Credit One, look at credit unions that offer low or no-AF secured cards, or cards that don't even do a credit check.

https://www.sdfcu.org/emv-creditcards

The secured card at the bottom of that page has a decent reputation.
Keeping indefinitely: IHG, SchwabPlat, CSP, Discover, Freedom, ED, BCE, Hyatt
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Might add: Proper business card, CSR, Ritz, Delta Gold, First Tech
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Vattené
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Postby Vattené » Fri Oct 31, 2014 11:06 am

I think this sounds like a good plan. It appears you're both approaching this in a smart way - you have an understanding going in that he won't use your account and this is strictly for credit-improving purposes.

His being an authorized user will definitely help him more than not, but I can't speak as to how much it will benefit him. I like to recommend store accounts as a better alternative to a full-fledged secured credit card. The approval requirements are relatively lax, so he may be able to get approed for one without having to tie up any resources. This was my route; you can see from my signature I racked up several, which then let me get into Prime Card Land. I got my first at 18 or 19 with no history whatsoever. You mention he has a non-perfect record on paying student loans, which could mean a lot of things. If he has a couple 30 or maybe even 60 day late payments, he could be in better shape than I was at the time with no history. If, however, it is more consistent and/or with longer late periods (especially against a short history with no other accounts) then I imagine he will have a hard time getting approved for anything.

He won't be able to put anything and everything on it like a secured card that's accepted anywhere, but this may be a good thing for someone starting out (it depends on the person) since it restricts them from putting everything on credit. Anyway, that's just my two cents. I think it is worth a try (depending on the severity of that spotty payment record). Either way, still add him as an authorized user. You can take him off whenever you please and it will help him out of a situation with limited other options.
-Vattené
FICO-8:
EX - 805 (12/16) | TU - 803 (12/16)
Primary Cards:
American Express EveryDay - $20,000 (10/14)
Discover it - $23,000 (2/14)
AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now

Brad Bishop
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Postby Brad Bishop » Fri Oct 31, 2014 12:07 pm

My recommendation:

You're not married, don't mix accounts.

He should be able to get a credit card from somewhere. It may be a secured card or whatever but he will, eventually, be able to get a credit card.

As soon as you add someone onto your account then you both run the risk of the relationship going bad and:
- he's stuck on your account and maybe you stop paying your bills and it adversely affects him
- he asks to use your credit card "just once" and then it's "one more time" until it's a regular thing and, essentially, you're not in the same position you originally bargained for.

If you get married then you become a single legal entity, to a certain degree, and it makes more sense.

Along a similar vein, I have two daughters. I could easily add them to my accounts or cosign on a loan for them or whatever. Instead, I've told them I won't do either and they should make their own way. They're both doing it, one through a secured card which will soon change to a regular credit card, and the other is just starting to dip her toe in the water.

There's no need to rush this as banks need new blood, otherwise their business dies off in 50 years. I'd also argue that banks have fairly low standards with regards to giving credit and if your boyfriend isn't meeting those standards then he should do what he needs to do on his side (make consistent student loan payments, get a secured card / entry level (high interest rate) card - pay it consistently on time) on his own. If a bank won't take a risk with him, why should you?

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lobbythis
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Postby lobbythis » Fri Oct 31, 2014 12:47 pm

His own secured cards will help way more than being an authorized user.

Tell him it's time to put his big boy pants on.

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nismoZtuner
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Postby nismoZtuner » Fri Oct 31, 2014 2:21 pm

lobbythis wrote:His own secured cards will help way more than being an authorized user.

Tell him it's time to put his big boy pants on.


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CarefulBuilder14
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Postby CarefulBuilder14 » Fri Oct 31, 2014 4:28 pm

I agree - he should get a secured card in his own name, rather than being an AU on one of your cards. This is in the best interests of his credit, his financial independence, your relationship, and your credit in case things go bad.

Keep in mind that if you have a bad breakup or if he thinks he really needs to buy something, he can always call and get a replacement card.

It's one thing for a child to 'piggyback' off a parent when starting out if the child is responsible and the parent can easily pay off the debt if things turn into a mess. If you were absolutely rolling in money and he was new with no good or bad history, I'd say adding him would be a reasonable option (in addition to having him simultaneously get his own secured card).

I'm really uneasy about you two sharing liability for anything, though, when he already has bad marks on his credit history from his student loans. A thin history with bad marks is a bad history.
Keeping indefinitely: IHG, SchwabPlat, CSP, Discover, Freedom, ED, BCE, Hyatt
May close or PC: Prestige, Arrival, BrooksBros
AA Platinum converting into Costco

Might add: Proper business card, CSR, Ritz, Delta Gold, First Tech
Letting new accounts cool off since May

popamode72
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Postby popamode72 » Fri Oct 31, 2014 7:46 pm

Just tell him to man up and get his own secured card for the sake of your relationship and try to convince him that it will be much better for him to be financially independent in the long run if you wanna make the relationship last too.

This kind of reminds me of how back in 2012 when I was really serious about going to an out of state college (Rutgers specifically) and was desperate enough to ask some of the teachers that had liked me the most to cosign some student loans and how none of them would do it. That was when I was much more naive about things from a financial perspective and this is also before I changed my mind and just took a gap year too but I can now see why they wouldn't have wanted to take on such a gigantic risk there to their credit if I were ever to default on those loans in the long run. It's better to just start from the bottom up and earn your way to having good credit rather than taking shortcuts a lot of the time.
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Vattené
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Postby Vattené » Sat Nov 01, 2014 5:48 pm

I am just not seeing that much risk here. Cosigning on a loan is an entirely different story. It's not like he even wants to share a bank account with you. He will be an authorized user on an account to which he has no access.

Is it possible that he will agree to shred his card then steal yours or call the issuer and try to get another one sent to him? Of course, it is possible. If you can see him doing this, then you should absolutely not add him as an AU (you should also probably rethink being with him at all). Ultimately this decision will come down to how much you trust him. If you do trust him - and I assume you would to be considering this in the first place - then go ahead and add him as an AU, but watch your account (which you should be doing anyway). If he ends up using the account behind your back anyway, then you've found out he isn't boyfriend material and it's time to, as Dan Savage would say, DTMFA.

Either way, it's been mentioned that being an AU won't help him all that much anyway. If you agree to it, he will get a little boost but he will still be better off getting something on his own on top of that. He can make his way on his own if he has to, and you shouldn't do it if you feel even the slightest bit uncomfortable about it.
-Vattené
FICO-8:
EX - 805 (12/16) | TU - 803 (12/16)
Primary Cards:
American Express EveryDay - $20,000 (10/14)
Discover it - $23,000 (2/14)
AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now

takeshi
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Postby takeshi » Mon Nov 03, 2014 9:20 am

Benefit really depends on the creditor he applies to in future and the scoring model used. Some ignore accounts where one is an AU so being being an AU wouldn't help him in such cases. IMO risk is fairly minimal if he doesn't have the card though. He should definitely work on building his own tradelines.



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