Being an authorized signer on your spouse's credit account can give your credit score a boost as long as your spouse's account is in good standing. To be in good standing, your spouse's account must be paid up to date with no history of late payments. When your spouse gives you permission to use his account by making you an authorized user, his financial institution will issue you a card on the account in your name.
Who Pays
As an authorized user, you have no legal obligation to pay for the charges on the account. If the account becomes delinquent, not only do you not have to pay, you can simply have your name removed from the account. Don't worry about your credit score, once your name is removed from the account, the delinquent account will be removed from your credit report within a month.
Check Your Credit
To verify that the delinquent account has been removed from your credit report, check with the three major credit reporting agencies, TransUnion, Experian and Equifax. You are entitled to check your credit for free once a year with all three agencies through Annual Credit Report (annualcreditreport.com). If the delinquent account is still on your report, contact the credit reporting agency to get it removed.
Who Benefits
Your children, once they are old enough to be responsible with a credit card, can benefit from being an authorized user on an account. It helps to give them a jumpstart on establishing credit. A spouse with no credit history or damaged credit history can improve his score instantly by being an authorized user on an account in good standing. Individuals with limited cash flow or who are struggling with debt can also improve their credit score by becoming an authorized user. Credit reporting agencies treat authorized users the same as the account owner when it comes to credit scoring, according to the Federal Reserve.
Piggybacking
Using a practice that came to be known as piggybacking, individuals trying to improve their credit scores were paying a fee to add their names as authorized users to the financial accounts of people with good credit. To stop this practice, FICO changed the rules for authorized users. To be considered a legitimate authorized user, you must have a card on the account holder's account in your name.
