How can being an authorized user affect your credit?

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Being an authorized user can affect your credit situation in a few ways.

The accounts you’re an authorized user on will likely appear on your credit reports — most, but not all, credit card providers report account activity to an authorized user’s credit reports.

Before you’re added as an authorized user, you may want the primary account holder to ask their credit card provider whether they report authorized user accounts to the three major credit bureaus.

If the account does show up on your credit reports, the primary account holder’s actions could impact your credit for better or for worse. (Exactly how much it will affect your credit depends on the scoring model, as different models weigh credit factors differently.)

If the primary account holder has a strong history of on-time payments, this can have a positive impact on your credit. Additionally, if the account’s credit utilization rate is low, this can also be good for your credit. You can figure out your utilization rate by dividing your total credit card balances by your total credit card limits.

On the other hand, if the primary account holder misses a payment on the card, your credit can take a beating — just one late payment can have a severe negative impact. The same goes for high credit utilization on the account.

In addition to becoming an authorized user, applying for a secured card could help you build credit if your history is limited. A good option to consider: Capital One® Secured Mastercard®.

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