Unusual Method to Improve Credit Score

There are many things people do in an effort to improve their credit scores, but there is one technique that is somewhat "off the beaten path".  One unique way to start the long road to credit score increasing, is to become an authorized user on a credit card of someone who has a long record of good payment histories.  How can becoming an authorized user of someone elses credit card improve your score?  The FICO score, as determined by the Fair Isaac Corporation, looks at the payment history of the credit card and treats that information as if the authorized user owns the card.  The credit score of the authorized user is quickly raised on behalf of the credit card owner's good credit!  This is a great way for parents to help children establish a credit rating, or for friends and family to assist others in re-establishing and repairing their credit scores.

Little Tricks to Help Someone Else

If you've got a child about to enter the world of credit borrowing, or know a friend or family member in need of a credit rating boost- you can help them if you've got a strong credit history with one of your own credit cards.  Register the individual as an authorized user of your account.  If you're afraid this person will take the card and spend like crazy, just register them and don't give them the credit card!  This way they'll have the benefits of your credit history without the danger of having access to a credit card.

As the card owner, you do not need to worry about affects to your own credit rating by putting an authorized user on your account.  Their rating will have no affect on your own credit score.

If You Need Help, but are Short on Willing Friends

Not everyone will know a person with good credit who is willing to make them an authorized user of their account- even if they don't give you the credit card, there is a chance that you could get a copy of your credit report to gain access to the account number of the credit card.

There are actually a few websites that offer this benefit, although you have to pay to use them.  For example, creditlaunchers.com and seasonedtrades.com charge $1,000 or more in order to get an increase in your credit rating by becoming an authorized user of an established account.  Just be careful of websites that promise to improve your credit score by offering you credit cards- they are likely trying to trap individuals who have a history of overspending on credit cards in order to benefit from your spending!

Problems with Authorized User Technique

While the authorized user can certainly benefit from the good credit of a card owner that includes them as a user, they can also experience a problem if the card owner stops making on-time payments to the card.  Sometimes, unforeseen circumstances arise that may cause the inability of the card owner to make payments and the credit rating of the authorized user would be affected by this issue as well as the card owner.

While this method may help establish credit for someone who has none or has very little credit, it is not going to completely repair a damaged credit rating.