I’m just starting credit repair. Can I skip opening my own accounts and just get a few authorized user accounts?
We do not suggest using authorized user accounts as a substitute for building your own credit. Authorized user accounts have their place in the credit repair process, but it should be limited to a supporting role. If you have a friend or family member that is willing to add you to one or two of their cards you will experience a boost in your credit scores. This is a wonderful thing and a boon for anyone starting credit repair who wants to get a running start, but it is not a great or lasting solution.
Authorized User Shortcomings
There are potential problems that can arise with authorized user accounts. For a start, the accounts do not belong to you. The donor may one day decide to utilize more of the credit line than you would expect, and your scores will fall. This is completely outside of your control. And if the donor were to default on the account you will almost certainly have a charged off account on your credit report. You may think that as an authorized user you would simply be able to remove yourself from the account if things go bad. You would be wrong. Creditors almost always refuse to remove authorized users from bad accounts. Authorized user accounts can provide a credit repair boost, but you must be aware of the downside as well.
Credit Repair and Lender Requirements
There is another shortcoming of authorized user accounts you should know about now, lest it pop up later and cause disappointment. Many lenders require that you have a certain minimum of accounts in your own name. Some mortgage lenders, for example, require that you have at least two open accounts in your own name to get approved. Authorized user accounts are listed on your credit report with the letter “A” and are easy to spot. In the long run your credit repair effort can only be truly successful if you build your own credit.