Your Money: Authorized users don't help your credit

Dave Ramsey: Adding an authorized user to your credit card will not affect that person's credit — for better or worse.
BY DAVE RAMSEY, For The Oklahoman Published: November 19, 2012
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Dear Dave: My brother asked me to put his name on my credit card as an authorized user. He said it will help improve his credit score. Is this true and would it help my score in any way?

Anna

Dear Anna: Your brother is wrong. It will not improve his credit score at all.

As an authorized user, he is not the owner of the debt. There's a high likelihood that it will affect your credit score in a negative way, though, because there's a good chance he'll do some dumb things with your card.

Look at it this way. Why would someone give him credit, or raise his credit score, just for using your credit? It doesn't make sense.

Your credit score is affected by things like whether or not you pay your bill on time. The card isn't in his name, so really all this amounts to is him having fun with your card, and you're the one who's liable for the damage. The truth is that authorized users shouldn't even show up on a credit report.

It sounds like your brother has some financial problems. While I admire the fact that he wants to fix things, this is not the answer. Don't misunderstand what I'm saying, Anna. Chances are he's not trying to con you. He probably just got some bad information. But the hard truth is this: If you go along with his idea, it's not going to help him, and it's going to hurt you. Don't do it.

Dave

Dear Dave: In terms of a family's financial plan, when is it OK to purchase something like NFL season tickets? Is this the kind of thing that should wait (to purchase) until you're debt-free and can afford to pay cash for them?

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