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• How a $6 Charge Made My Credit Score Drop 100 Points

When my little brother (he’s 24) told me he wanted to get a place with his girlfriend – their own place – the first thing I asked was, “How’s your credit?” because I knew they’d check.

He didn’t know. When we checked, his score was a dismal 586. It wasn’t because he had bad credit. But because he had no credit at all. Literally, zero accounts ever in his life.

I think I have 30 credit cards by now (?), a paid-off auto loan, and about to have two mortgages. With regard to my brother, hopefully I’ve helped create a path to his own points and miles journey.

But first things first.

Address matters when you add an authorized user

We don’t live together. He’s in Memphis, and I’m in Dallas. So I wanted to get him a card with a bank that DOES ask for a Social Security Number for authorized users.

Citi and Chase do NOT ask for this information. Without an SSN, the account can still appear on the authorized user’s credit report provided the addresses match – which ours obviously wouldn’t (unless I said he lived with me). Even still, I didn’t want to wait for the pairing to happen on the back end.

Amex, Bank of America, Barclays, and US Bank DO ask for an SSN for an authorized user account – perrrfect. I added him to my Amex Hilton account because the card was new and the statement was set to close the soonest.

Plus, the address thing didn’t matter because I tied his SSN, and therefore his personal credit report, to the card.

Amex has the best authorized user controls

With most banks, you can’t adjust the spending limit on an authorized user’s card. Meaning they have access to your entire credit line.

Bank of America and Chase let you set spending limits on employee cards if you have a small business card with them. But Amex is the only bank that lets you set controls on personal cards.

You can also set an alert if the user approaches their limit. This is helpful to know when there’s a lot of activity on the card.

When the card arrives, the authorized user can create their own login, and get access to Amex Offers. You can NOT link the new card to your existing Amex account. You have to create a new one if they want access. Although you can still make payments and see the charges in your own account.

What happened after a month

After the statement closed, I wondered if everything had “plugged in” correctly. And asked my brother to pull his updated score from Credit Karma.

Between April 13th and May 18th, his score went up over 100 points – to nearly 700! I wasn’t expecting it to rise so high that quickly.

As of now, the authorized user card is his only account. And even though I set a spending limit on the card, the credit report shows the entire credit line – which is a nice side effect.

He probably can’t open his own credit cards with only one account on his report. And I thought it may not be enough to get an apartment. But the landlord said they only look at the score – and as long as it was “good,” that’s all they wanted to see.

He got the place and they’re moving in this weekend. Now I’m wondering how long before I can sign him up for a few Chase cards (of course). Although I’m thinking a secured card might be the way to go for now?

Should you do this?

If you have kids, or someone you really trust, it’s nice to get them started early with a good credit score and well-aged accounts. Looking back, I wish I’d added him to one of my cards years ago.

Just remember, whatever charges they make on their card, YOU are ultimately responsible for paying. Yup. Even though they can make their own payments, if they don’t, it’s your credit that’s ultimately on the line.

Giving someone a boost to their credit score is awesome if you can do it. Go for it, just be responsible.

Bottom line

I wanted to boost my brother’s credit score by adding him as an authorized user to one of my cards. Well, it worked – his score shot up over 100 points within a few weeks.

I’m hoping this is the beginning of a journey to responsibly use credit and eventually get him on the points and miles train. 😉

He had nothing on his credit report before this – good, bad, or otherwise – so I don’t know how much it would’ve helped if he’d had derogatory marks. But, I’ll keep him on the account – the card is free to keep anyway – and that’ll help to age his account over time. If it goes up to 720ish, I might see if I can get him a card of his own.

Wanted to share this – thought it was really cool. Has anyone else had a similar experience helping someone’s credit score by adding them to an account? 

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