Authorized User vs. Secondary Applicant

[Ed]

I want to help my daughter build good credit, so I asked my credit card company to add her as an authorized user on my credit card. They told me that authorized user are no longer reported to the credit bureaus, and that I need to add her as a second applicant.

1. Are they correct?
2. What are the main differences between authorized users to second applicants?

Thank you

[Tracy Winters]

You where misinformed

I’m surprised at what they told you, because they are wrong. It’s called piggybacking and Fico recognizes it.

Fico has made some changes to how it deals with authorized users, but spouse, kids & parents that are authorized user do benefit from it. The card WILL appear on their credit report and WILL build good credit for them (See credit-piggybacking.html) for more information.

There is one fundamental difference between authorized user and secondary applicant. When adding someone as an authorized user, that someone doesn’t undergo credit check because he has no liability.

However, when you add someone as a second applicant (making the account a joint account) that person’s credit is checked. Most likely that you daughter won’t pass the credit check, not to mention that it’s not a good idea to have a joint account with your daughter.

Return to the credit card company and simply add her as an authorized user.

[Author]

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