Will it help build my credit if my father added my name to his card?

[Janell]

I have no credit card of my own, so my father suggested adding me as an authorized user to his credit card to build my credit. He has good credit. Is it a good idea? Will it build credit for me? Are there any draw backs to it?

Thank you

[Tracy Winters]

It will build up credit for you

it’s a very good way to start building credit. It even has a name – Credit Piggybacking. It is common, legal and even the credit bureaus acknowledge it between husband, wife and kids.

As an authorized user the account will show on your credit report, building you credit history and a credit score.

It’s important to note that you don’t benefit from your father’s good credit. Yours and his credit are totally separated. You only benefit from the stream of positive credit information every time he pays his statement.

Adding you as an authorized user is preferable to adding you as a joint user, because you benefit from credit building perspective while not being held liable to any debt associated with the account, should anything bad happen in the future.

The only draw back is that much like it’s building good credit for you, if your father starts getting behind, or ever worse – defaults then it will ruin your credit as well as his.

I wouldn’t worry too much about it though. It’s rare for someone with bad credit to add another party as an authorized buyer on a card. It’s much more common with those with good credit to do this as they are aware of the benefits.

Down the road when you have established credit in your own name, you may want your father to remove you as authorized user from his card. Authorized user accounts can become problems when you apply for mortgages or car loans, because they get included in your debt to income ratio.

Good luck.

[Author]

Posts