Do Authorized User Tradelines Work?


The first question anyone looking at authorized users should ask is whether or not they work. The answer to that depends on your specific situation. If you were asking this question before 2008 i would have said that they worked 100%.

Since 2008 there have been several changes that have affected how they work. The first major change is that lenders found out about this tactic and started creating plans and processes to make sure that the customer didn’t benefit as much as they did pre 2008.

Reporting Schedule

The biggest change was that most lenders changed their reporting schedule. Instead of reporting these tradelines within 30 days to all 3 credit bureaus most lenders only report the tradelines to 1 bureau and in most cases take up to 3 months before they send the information to the credit bureaus. This change is okay if you are piggybacking using a friend or family members credit card. However if you are using a broker the reporting becomes to sporadic and unreliable.

Length Of Time Reporting

Another major change was how long the tradeline remained on your report after you were added. prior to 2008 if you were added to someone’s credit card as an authorized user and then later you were removed (as is normally the case when using a broker) the history of the tradeline would remain showing on your credit report and would be marked closed. This allowed you to benefit from the age of the account forever. Since 2008 if you are removed as an authorized user the entire history of the AU account will be removed as well.

Underwriting Awareness

As lenders were made aware of this tactic several of them changed their underwriting guidelines, especially when trying to get a mortgage, to specifically check and challenge an authorized user account that looked the least bit suspicious.

Although these accounts still work to increase and improve your credit scores care must be taken when adding them to your account. The last thing you want to do is get yourself involved with a broker who uses accounts that have sporadic reporting or use this tactic when the lender specifically underwrites against it.