Authorized user accounts have been a traditional method for young consumers to build a credit history and a credit score. The consumer is added to an existing account as an authorized user but normally is not the individual making the payments on that account. Mortgage lending now requires that consumers who have their credit score based mostly or wholly on authorized user accounts have their credit re-scored for mortgage purposes without the authorized user accounts. This re-scoring typically drops the credit score and can at times eliminate credit scores completely. Lower credit scores can make the loan process tougher, more expensive or not approvable. Most loan programs do not allow for a consumer with no credit score.
Consumers just building a credit history should not rely on authorized user accounts but get credit in their own name to avoid problems in mortgage qualifying.
Thinking about buying a home? First thing a potential buyer should do is get pre-approved with a local lender. Next, start a relationship with an experienced buyer's agent who works that area you are interested in.
Good luck!
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