Dear Mary: I’ve heard that adding someone to your credit card will help that person establish a credit history, even if they do not use the card. Is that true? How would I go about doing it? — Pat
Dear Pat: It is true. You would add this adult (at least age 18) as an “authorized user” to your account by calling your credit card issuer’s customer service. (Find the toll-free number on the back of your card.) An authorized user has all the privileges of using the account without any liability for repayment.
I know it sounds crazy, but that’s the way it works. As activity on the account is reported to the credit bureaus, it goes into the files of the primary account holder (you) and the authorized user’s file. That means the authorized user benefits from piggybacking onto your good credit being reported on that account. (Surprisingly, perhaps, your authorized user does not have to be aware you have done this. You could add your teenager as an authorized user without him or her knowing.)…