What makes a good Authorized User (AU) card?

I’ve been meaning to share what I know about Authorized User (AU) cards for some time. Now is as good a time as any, and this is as good a place as any to share it.

What makes a good AU card? When someone uses the term “well-chosen AU card”, what do they mean? Are some cards better than others? Are they talking about a high credit limit? Or a long-opened CC account? Does utilization matter? Are some credit card companies simply better at it than others? Well, I’m here to tell you…the answers to those questions are pretty clear.

If it matters to the reader, I’ve been creating AU cards for family and friends for more than 20 years. I personally believe AU cards can be quite valuable for someone just starting out on their credit journey, and for those with damaged credit as well. To put it bluntly, there’s a reason people pay companies $300-1000 a month for AU cards: it’s because they can change a credit score for the better within weeks. I’m not saying an 18 year old kid with a 780 fico 8 due to AU cards is going to qualify for an auto loan, but a high fico score has measurable benefits: lower interest rates, increased credit approval odds, and a foot in the door. Those things have value.

Rather than drag it out any longer…here’s what makes a good AU card:

For maximum fico 8 scores, the card must have been opened for more than 1 year. That’s all it takes. One year. One year or 10 years? It doesn’t matter. One year or one month? It matters. I know this flies in the face of conventional wisdom, but I’ve tested it. Recently. It literally doesn’t matter at all as long as the card has been opened for at least a year. Less than a year and you’re probably going to see a penalty. Presumably the AoYRA<12 months penalty.

For maximum fico 8 scores, the AU card credit limit does not matter. For example, whether the AU card credit limit is $2500 or more than 20 times that amount, a person with nothing in their credit reports could expect to see a fico 8 of around 750 when the AU card lands. Assuming the next detail is met:

For maximum EX fico 8 scores, the overall utilization has to be under 6% (what Experian calls “Elite” status). If an individual only has one account in their credit reports (an AU card, in this case) the AU card must report less than 6% utilization to see maximum EX fico scores. If the individual has more than one revolving account, then they’re going to have to do a little math. Because neither MyFico nor Experian correctly calculate utilization in their front end when AU cards are involved. The important thing here is to do the math, because the actual fico algorithms do correctly calculate utilization when AU cards are involved.

My last point is subjective, but may be useful to some. The question of “who does AU cards right?”. In my personal opinion, the answer is Capital One. Head and shoulders above the rest. “Account managers” (AU with perks) can see their charges online, add the AU account to their app, pay their portion of the charges (or the whole balance if you wish) and the experience is seemless. No one else approaches it. My second choice would be Discover, but they’re playing for silver. I’d be remiss without pointing out that Chase has one benefit that Capital One lacks (the ability to create an AU without inputting the authorized user’s SSN) but Chase AU cards are hit or miss. Sometimes they don’t “take” - the card is simply never created. And sometimes they take, but never land on the authorized user’s credit reports. A problem exacerbated by not including a SSN. Lastly, I should point out that some credit card companies don’t export the card’s entire credit history to the credit bureaus. Amex, for example. Personally, I don’t see this as a big problem for people with strong credit profiles, but it’s something to be aware of for those new to credit or needing the biggest scoring boost possible in the shortest time. If it weren’t for this lack of AU credit card history, I’d consider Amex as my second choice behind Cap One.

If this post generates interest, I’ll share the results of all the score changes I’ve recorded due to AU cards. Some had no credit, others average to good credit, and some had poor credit. If you have any questions, just ask.

Great post, @Rowdy_Dodger ! You are definitely what I'd consider an "expert" on the subject of AU accounts. If I ever have an AU account related question, I know who to ask. I think individuals on here would be interested in seeing some of your scoring result data related to AU accounts. I know you've shared some of that info with me in the past, but having it consolidated in a single thread for future reference I believe would prove to be a beneficial resource.

This is excellent! Questions about AU cards are asked often, so having this information, based on your research is invaluable. @BrutalBodyShots is right - you are an expert on AU cards. I'm especially happy to see you write about the AU card's age. This one question is probably the one I see asked most often, so I'm glad we have an answer. The same with utilization. Very good information!

Rowdy_Dodger wrote: ↑Sun Mar 17, 2024 9:48 pm If this post generates interest, I’ll share the results of all the score changes I’ve recorded due to AU cards.

Please do.

Due to the interest of @BrutalBodyShots and @Slabenstein , I’m going to list the scoring changes due to AU cards that I’ve personally witnessed. This list will be updated in the near future because I’ve been on something of an AU card bender recently, and data is still coming in. The first two individuals I want to discuss had zero credit history, and neither of them had a fico score. I’m discussing them together because they’re an interesting contrast: the male was made an AU on a 14 year old card with a 23k credit limit. The female was made an AU on a 13 month old card with a $2500 credit limit. The male’s debut Experian Fico 8 was 747, and the female’s was 743. The small 4 point difference was almost certainly due to utilization; the UT on the male’s card was under 2%, while the UT on the female’s card was slightly over 7%. The next individual had serious credit issues - several charge offs, multiple collection accounts, and nothing reporting in good standing. This person’s fico 8s were all below 520. I made this person an AU on a Discover card, and their EX fico 8 jumped 37 points! That’s the largest increase I’ve ever seen for someone who already had a fico score. I also added them to a Chase card as well, but unfortunately it didn’t take. I’ve since added them as an AU to an Amex credit card, but it will likely be another month before it reports. I’ll update this post when it does. My guess is that it will increase their scores by an additional 10-15 points. I’d like to add something interesting about the person I just described with poor credit. As I mentioned, I saw his EX fico 8 increase by 37 points, which was more than I expected. Someone who knows more about AU accounts than me told me that was a great improvement, but not the largest jump he’d ever seen. This person further told me the largest fico 8 increase he was aware of was 45 points. This person creates AU accounts for a living, so he’s probably seen it all. Next up is a superstar: exceptional credit, smart, beautiful, and, ahem…unassailable taste in husbands. In some ways, she is the polar opposite of the individual I just discussed who had poor credit. Unlike that young man who treated his financial obligations cavalierly, this woman has maintained an exceptional credit profile for over 30 years. Her current fico 8s are in the 820s and 830s, and I expect them to hit 850 by fall. A small contributing factor to those scores are the 4 AU cards she currently has (3 credit cards and 1 charge card). By my reckoning, they are currently adding about a dozen points to her score. I’ll discuss the method I used to calculate the AU bonus she is receiving a little later on. And - just so it’s clear - adding more AU cards will not increase her scores by even a point, unless they happened to lower her UT below a threshold point; the prospect of which is unlikely considering her substantial total credit limit and habit of buying things on my cards. It was not a coincidence that I described my wife’s AU card adventures after the gentleman with poor credit. The two of them neatly bookend what I have seen AU cards do to fico scores. The vast majority of score increases fall somewhere in the middle; those that don’t are because of something I have done either accidentally or on purpose. More on that later. The next person I want to describe is a young person who was relatively new to credit when I made her an AU. Her EX fico 8 jumped from 730 to 755 when I made her an AU, and her TU vantage score 3 jumped 55 points! The large VS score increase is probably partly due to the credit limit of the AU card I chose for her. Unlike Fico scores, I believe Vantage scores pay out for increasing total credit limits. Up to a point, at least. Interestingly, also unlike fico scores, vantage scores (both versions 3 and 4) don’t have an Authorized User All-Zero penalty (aka no recent revolving credit usage). This is my way of segueing into a brief discussion on the Authorized User All Zero penalty. When Brutalbodyshots first suggested to me that there was a penalty for reporting $0 balances across all revolving accounts, I thought he was full of it. I had spent a good deal of time and money monitoring my credit over the years, and I’d never heard of such a thing. I was a diligent micromanager of my balances and had excellent credit and thought I knew it all. I couldn’t wait to report a balance so I could rub the all-but-certain score drop in his face. That’s not exactly how it played out, tho. Instead I ended up getting my proverbial ass handed to me, but he was good-natured enough about it. It was at that point that I started to really listen to the things he was saying. And one of the things he told me (along with @Birdman ) was to read the fico scoring primer. A task I’ve since repeated many times over. It was in that body of work that I discovered there was an All-Zero penalty for authorized user cards, too. Nine points. I just had to see how big the all-zero penalty was for myself once I knew it existed, and I ended up losing 9 points at Experian for my fico 8. Done and dusted, I figured: the authorized user all-zero penalty is near enough to 10 points to just round it up by one and call it good. Except…I was the only one who was seeing a loss of 10 (really 9) points. My wife only lost 7 points. And another person lost 13 points. And another person lost 20 points! What was going on? I was determined to find out. I guess this comment is turning into a book. That wasn’t my plan, but I’m gonna see it out. I still need to describe how to easily calculate the AU card fico bonus, the effect of multiple AU cards and when they will (and won’t) move scores, and how to roughly predict what an AU card bonus will be. I also have several other data points I need to work into the narrative as well. Stay tuned.

I’m creating a new comment for additional updates because the last comment I made was becoming increasingly unwieldy to edit.

It would be instructive here to list the fico scores of the authorized users I described above who experienced the all-zero penalty and briefly outline their credit histories. At the time I lost 9 points, my EX fico 8 was around 790. My wife (who lost 7 points) was sitting around 815. Both of us have clean, mature credit histories and dozens of accounts (counting both open and closed) on our credit reports.

[Unfinished]

It was a challenge to figure out how the Authorized User All-Zero penalty is calculated. Partly that was due to the fact that AU bonuses aren’t constant; as I’ve already discussed, they can range from perhaps a dozen points to possibly upwards of 45 points for those who already have a fico score. Part of the difficulty lies in the fact that the All-Zero penalty is also not a set number; the penalty can vary by nearly a factor of 3. Possibly more. Another (underappreciated) fact is that the AU card bonus can change over time; as your fico scores increase, your AU card bonus will decrease. The gentleman who saw a 37 point increase in his EX8 would see that bonus drop considerably if he were able to clean up his credit reports and move his fico scores into the “good” or “very good” range. And partly it was due to the fact that I was doing this alone. I’m not exaggerating when I say it’s not as easy as you’d think to convince someone you don’t know well to become an authorized user on one of your credit cards just so you can see how many points their scores change.

It’s worth taking a moment here to discuss another practical concern about AU cards. If, for example, I decide to make my wife an AU on a credit card I have so we can share benefits, she’s unlikely to care or even notice unless I mention it to her. She no longer keeps track of her credit scores or looks at her credit reports, and - as long as I make sure the bills are paid each month - she’s happy to leave it all to me. We’ve been married for a long time and we have a system. I wouldn’t suggest it’s for everyone, but it works for us. Having said that, the vast majority of people I make AUs do not have the extensive experience with credit that my wife has had. If I make someone with little to no credit history an AU, I’m essentially volunteering to become their credit mentor. And - because I ask everyone I make an AU to monitor their fico score at Experian - they get a lot of alerts. And have a LOT of questions. Which is the reason I now have to micromanage every single card I have that has an AU attached to it. Allow the utilization to go too high or let a $0 balance report, and I’m all but guaranteed to get a panicky text asking what’s going on with their credit score. And once they have credit of their own…the texts don’t stop til they have it all figured out. Which can take a very long time. Something to keep in mind before you take on the responsibility of making someone an AU. Just a word to the wise.

Rowdy_Dodger wrote: ↑Fri Mar 22, 2024 8:55 pm It would be instructive here to list the fico scores of the authorized users I described above who experienced the all-zero penalty and briefly outline their credit histories.

If you're keeping track of that in Excel, there is an easy way to copy-n-paste a range of cells into a post here. My code will make a nice pretty table out of it. Tap the 'Excel Import' button while in a post/reply/quote for the details. Great information here! I already submitted the topic link to IndexNow.

Thank you, @Cassie. That’s kind of you to say. I don’t use excel to keep track of this work; I just use a notebook and supplement it with screenshots where I can. I’m not certain excel would lend itself well to track these changes, because - like so much that is credit related - the overall credit profile is king. Without knowing what is on a person’s credit reports, it’s impossible to know, for example, whether a second AU card will further increase someone’s fico scores or not. I would like to find a way to present this data in graphic form, but I haven’t discovered a sensical way to Illustrate it. A flow chart might be the most informative method, but I don’t know if I’m knowledgeable enough to accurately create one. I believe I could create a tentative flow chart, but I’m concerned it might contain assumptions that aren’t accurate. I’ll finish this out in the next few days, and I’ll add what I’m able to for the mortgage scores, 10 series scores, and vantagescores. I might clean things up a little as well, and there are a few common AU card myths I’d like to dispel, too.

Rowdy_Dodger wrote: ↑Sat Mar 23, 2024 2:06 pm I’m not certain excel would lend itself well to track these changes, because - like so much that is credit related - the overall credit profile is king. Without knowing what is on a person’s credit reports, it’s impossible to know, for example, whether a second AU card will further increase someone’s fico scores or not.

Maybe it could be something like: Date Score Model Primary User Scorecard (C8 to C1 for clean, etc.) Primary User Score Primary Number of Cards AU Scorecard AU Score AU Number of Cards ..and whatever else seems necessary. Credit limits aren't considered in the algorithms, and those are going to vary wildly due to blackbox internal lender algorithms. The Young/Mature threshold is definitely important for score changes, and the scorecard number would tell us that anyway.

I was confused by the $300 - $1000 per month for an AU card? Wow, I really have not given the whole AU thing this much thought. My 13 year old is leaving tomorrow on his 8th grade East Coast field trip so several months ago I made him an AU on my citi Double Cash. 2.22% should be good enough (not sure if I could have made him an AU on my 3% AOD?). I'm not sure if I am helping his credit in any way at age 13. Also, citi never asked for a Social so I'm thinking not? For now I just wanted him to have a card for the trip. I may look into an AU card for him in a few years that does require his Social. I'll do the same for my 7 and 11 year olds when they get older.

Hi @ptatohed , those are good questions. Before I answer them, I should mention that it’s no more necessary to know all of this information about AU cards than it is to know exactly how an engine works before you drive a car. I have only provided it because there will always be some individuals who want to tinker under the hood, and I’m doing my small part to add to the user manual. The $300-$1000 was mentioned because authorized user cards are valuable to some people. As such, crafty individuals have stepped in and created companies to provide them. For a cost. I personally don’t think it’s wise to rent an authorized user card from one of these companies because way too much personal information has to be handed off to unknown third parties so the cards can be created, but it happens nonetheless. Regarding the best time to make a child an authorized user…that’s a personal choice best left to the parents. My son was a responsible child and asked to become an AU at 15, and my wife and I gave him a chance. He adhered to the strict rules I laid down and learned a lot. Today he is a responsible man with his own family and has done very well for himself. My wife and I are very proud of him. On the other hand, I waited until my niece was 18 to make her an AU and I regretted waiting so long. Perhaps if I had made her an AU when she was younger, I might have been able to prevent her from becoming a victim of childhood identity theft if I had taken a more active roll in monitoring her credit. Regardless, we eventually managed to get her credit fixed and she recently graduated college and now has a great job as a teacher. She is thriving and has excellent credit and a great future and I’m very proud of her, too. It’s worth noting that - whether I had made them AUs on the day they were born or the day they turned 18 - it wouldn’t have changed their debut fico scores because AU cards aren’t included in fico credit age calculations. I don’t bank with Citi, so I can’t answer the question of multiple AU cards from them for your child with 100% certainty, but my wife and I have made people authorized users on multiple cards from Chase, Amex, and Capital One with no problem. It would actually surprise me a great deal to learn that Citi limits the number of AU cards you can create for one person, so I’d imagine there would be no problem to make him an AU on the other card as well. If you have any other questions, don’t hesitate to ask. If not, good luck to you and yours.