One of My Credit Cards Is Older Than I Am. Here's How
by Lyle Daly | Updated July 21, 2021 - First published on Jan. 26, 2021
No time travel was involved, and it isn't a glitch, either.
Anyone who knows how old I am would do a double take if they saw my credit file. I'm 30, but my oldest credit card account is 31 years and 3 months old.
That's great for me, because the age of a person's credit accounts affects their credit score. By having such an old account on my file, it gives my credit a bump in the right direction.
How is this possible, though? There's a simple explanation -- I'm an authorized user on my father's credit card. That means it's part of my credit file and gives me an account much older than any I could've opened on my own.
The benefits of being an authorized user
When you're an authorized user on another person's credit card, that card gets added to your credit history.
One area where this can really help, especially for young adults, is the age of your credit accounts. This is a factor used to calculate your credit score, counting for 15% of your FICO® Score. It includes a few measurements, including the oldest credit account you have and the average age of every credit account you have. The higher both numbers are, the better.
Normally, the only way to improve your score is time. You need to wait as your credit cards get older and your score gradually improves. But being an authorized user gets you around that pesky requirement and can turbocharge your credit.
Since my father made me an authorized user on his credit card when I was a teenager, I've always had a higher credit score than I would have gotten on my own. Without that authorized user account, my credit history would be about 20 years shorter.
This isn't the only way that being an authorized user helps your credit, either. If the cardholder makes their payments on time, those count toward your payment history. The card's balance and credit limit will also be reported on your credit file. If the cardholder doesn't use too much of their credit limit, that's good for your credit utilization ratio (how much credit you're using compared to how much you have available).
As an authorized user, you also get a credit card tied to the cardholder's account. You don't need to use the card for your credit score to benefit. The cardholder can even hang on to the card if they want to help you build credit without letting you make purchases on their account.
What if I lose my oldest credit card account?
Here's a scenario you could be wondering about, especially if you're also an authorized user and it's boosting your credit. A cardholder can always decide to remove an authorized user or close the credit card entirely. What kind of effect does that have on the authorized user's credit?
If the card is having a positive impact, then losing it will likely cause a credit score drop. The amount your score decreases depends on how much that authorized user account was propping up your credit.
This is why it's so important to have your own credit card. You don’t want to rely on someone else's card to give you a good credit score. Being an authorized user can jump start your credit, but you should also open at least one card that you control. As you establish a credit history on your own card, that authorized user account won't be as crucial.
Since I now have several credit cards with lengthy account histories, I don't need to worry about losing my authorized user account. To double-check, I ran this possibility in the credit score simulator tool offered by one of my credit cards. According to that simulation, my credit score would only drop by five points if I lost my oldest credit card account.
Even though I don't need it now, that authorized user account was very beneficial for me when I was younger. It's not easy to start with a blank credit file. If you're in that situation, it's worth seeing if any family members could help you out. And if you're a parent, making your child an authorized user is a fantastic way to help them establish or improve their credit.
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