It would appear that authorized users on someone else’s credit card have all the advantages. They aren’t liable for any debts on the card, even their own, and can happily ‘piggyback’ on someone else’s good credit score. Many times parents may add a grown child as an authorized user, or spouses add each other. If the primary card holder uses credit responsibly this is reflected in the credit report of the authorized user, thus allowing them to boost their own credit score and establish a credit history.
Fair Isaacs who compile the FICO credit score are not too enamoured of the practice of piggybacking as it is has been abused by some companies. Some have flagrantly used it to improve the credit scores of clients with bad credit. Fair Isaacs considered rescinding the practice of considering authorized card holders links to primary card holder’s credit use when compiling their credit score, but have instead factored in checks which prevent the system being abused.
Many authorized users are now discovering the negative side of piggybacking on someone else’s credit. If the primary card holder handles their credit card account irresponsibly, this will be reported on the credit report of the authorized user. Both Equifax and TransUnion link the authorised user’s credit report to that of the primary user, thus both positive and negative information is recorded. Experian reports in a different way, by only linking the positive credit use of the primary user to the authorized user.
The FICO score is compiled of information from each of the three credit bureaus. Thus if the primary card holder misses a payment or pays late, this information will show as a delinquency on the credit reports of the authorized user, which in turn will have a negative affect on that person’s credit score.
The Vantage scoring system does not record any data regarding authorized users, thus the Vantage credit score is not influenced in either a positive or negative way. The Vantage score relies on a person establishing their own credit record rather than piggybacking.
Those who discover that their credit score is indeed negatively affected by being an authorized user should request that the card issuer removes them and closes their card. However it may take up to 60 days before the information is expunged from their credit report, and whilst the negative information is removed so is their credit history.
Those who are seeking to establish their own credit reputation would be better doing it in their own name, so they are solely responsible for both good and bad information on their credit reports. Whilst one may speed up a good credit score by piggybacking, it could well be wiped out along with all credit history if the primary card holder fails to conduct their own card in an exemplary way.