Clark Howard Settles Credit Score Debate: How to Help a Family Member Without Risking Your Own

"“She is right. Okay, so when you make somebody an authorized user on one of your cards, it's only that card that then can figure in their credit. So your other stuff, if you mess up on something else, no impact on your brother.”"

"“When you add someone as an authorized user, the card issuer reports that single account to the credit bureaus under the authorized user's file. Your mortgage, car loan, other credit cards, medical collections, none of it crosses over. The authorized user inherits the payment history and utilization of one tradeline only.”"

"“This tactic works for credit building because a card with a long, clean payment history and a high limit can lift a thin or middling credit file fast. The two factors doing the heavy lifting are payment history, the largest input into a FICO score, and credit utilization, the second largest.”"

A caller had an 810 credit score and wanted to help a brother with a 690 score by adding him as an authorized user on the couple’s largest credit card. The husband worried that mistakes on other debts could hurt the brother’s credit. The ruling stated that authorized-user status limits credit reporting to the single card being shared. The credit bureaus receive that account under the authorized user’s file, while other accounts such as mortgages, car loans, other credit cards, and collections do not transfer. Credit building can improve quickly when the shared card has a long clean payment history and a high credit limit, because payment history and credit utilization drive major scoring changes.

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