How does a bank determine when to report you to Credit Bureaus when added as an Authorized User on a Credit Card?

Question

I've heard that when you are added as a an authorized user on a credit card, it would be reported on your credit history.

Example:

• Larry has a Chase credit card
• John Doe has no credit cards
• Larry adds John as an authorized user on his Chase credit card. All he has to enter is first name and last name "John Doe" and John Doe becomes an authorized user

Questions:

1. How does the bank determine the identity of the Authorized user if all that's entered is the first and last name (there are thousands of people in the US named John Doe)
2. Is there a way of requesting the bank to report you as an Authorized User?
3. Is there a way of requesting the bank to NOT report you as an Authorized User?

Answer 1

Chase does not have to verify the identity of John Doe. No new credit account is being established, so the identity check requirements are not required. The account is still owned by Larry alone; adding an authorized user does not modify the credit agreement between Larry and Chase. Larry is the person taking the risk of adding an authorized signer, not Chase. It is Larry's concern to verify the identity of John Doe.

Every bank can decide at their discretion if/how authorized users are reported to the credit bureau(s). You may submit a request asking them to report or not report, but it is unlikely they will deviate from a standard policy to honor your request.

Answer 2

It is up to each bank, and the rules can change unexpectedly even within a single bank or user.
For example, the bank might add to an authorized user's credit report normally, but then if any questions are raised regarding the accuracy of data in the report, the account comes off the credit report completely.

Therefore, you should probably NOT raise questions about inaccurate data in an account you are an authorized user on, if that account also contains positive information (e.g. long history, credit limit high enough to impact your utilization score, etc.), because you will be penalized by the removal of the positive information in a way that does not happen on accounts you 'own.'

On the other hand, if you are an authorized user on a card with primarily negative information, that is reflecting negatively on your credit report, you can request the credit bureaus remove that information and they most likely will.