The "Authorized User"

So does adding a person to another person's credit card account as an authorized user really help to increase the credit score of the person being added as the authorized user? This is a very popular question which has been coming up for years and even more so over the last few years. The reason it has become even more commonly asked over the last few years is because there has been a lot of controversy, discussion and changes made by the credit bureaus in regards to authorized users.

The credit scoring guidelines began to change around September of 2007 for how accounts with authorized users impacted credit. Before this time, adding someone as an authorized user to a credit card account would greatly impact the authorized user's credit score (as long as the credit history and credit usage of the credit card account were excellent). However, new guidelines to credit scoring were created to stop this from happening. Therefore, no longer will adding a person to a credit card account have any impact on the authorized user's credit score.

One of the key reasons for this change is because this credit building tool was being highly abused. There were companies and people out there charging others large sums of money to add them on as an authorized user as a method of quick credit score boosting. This helped people who may not have otherwise qualified for loans, credit cars, home, etc... to now qualify or to qualify for better rates than they were deserving of according to the credit professionals. Thus, this practice has been changed to make adding authorized users as a method of quickly improving credit scores worthless.

So why did credit bureaus permit this in the first place you may be asking yourself? They did this to allow parents to help their children try to establish strong credit when the children were ready to start building credit. Obviously this was very helpful to many. However, due to the abuse which happened from this credit building technique, lenders began to pressure the credit bureaus to change their scoring policies to prevent these inflated credit scores.

Remember if you need help in establishing, rebuilding, fixing, or improving your credit please visit www.CreditRepairXYZ.com. Make it a great week everyone and looking forward to posting again very soon.