Authorized Users

• When a credit card application gives space to add extra card holders but does require their signatures, this generally refers to authorized users. An authorized user is a person who has a credit card in his name with the same account number as the primary account holder, but he has no responsibility to pay the debt. Because he is not held responsible for the debt, the credit card company does not run a credit check on him. Only the primary applicant's credit score affects the application.
  
  

Joint Cardholders

• Some credit card companies allow two individuals to apply to be joint cardholders. This is sometimes called co-signing. In a joint applicant situation, both individuals provide their name, address, Social Security number, job status and income. The credit card company runs a credit check on both individuals and considers both credit scores to determine whether or not to approve the application. If one person has bad credit, this can result in a higher interest rate on the account, or in some cases, a rejected application.
  
  

Considerations

• Adding someone with a bad credit score as an authorized user can help her build credit history and boost her score. Many lenders report the account history on the authorized user's credit report as well as the primary account holder. Therefore, if you pay on time and keep the balance on the account low, it will benefit both of you. However, some credit scoring models do not consider accounts on which you are only an authorized user, so in that case, the account will not affect the authorized user's credit history at all.
  
  

Warning

• If you are adding someone with poor credit as an authorized user on your credit card, consider whether you are willing to pay for all of this individual's purchases. You are the only person contractually obligated to pay the debts, so if your authorized user makes charges and does not pay you for them as you might have informally agreed, you are still stuck paying the bill. Do not add an authorized user to your account unless you trust this person to use the credit card responsibly.