Are you applying for your first credit card or trying to rebuild bad credit, adding a co-signer for your application can help you get approved. A co-signer is the second applicant, usually one with good credit and income history, which ensures that your credit card balance will be paid if you default.
Most credit card issuers do not allow for a co-signer, even on their student credit cards. And be aware that even when the co-signer is allowed, it may be difficult to find one, because it becomes a co-signer means taking responsibility for other people shopping. If this happens, you have other options, including being the authorized users and apply for a secured credit card. To learn more about the people around, read on below.
Co-signers vs authorized users
Get added as an authorized user on someone else's credit card account is generally easier than finding a card that will allow the co-signer. And with most of the major issuers authorized user activity report to all three credit bureaus, it might seem like a better option. But before choosing that option, considering the losses.
When you are approved for a credit card with a co-signer, you and your co-signer becomes the owner of a joint account and both are responsible for paying back the balance. If you are an authorized user, but you can make a purchase with the card, but you're not on the hook for payment. For that reason, the FICO credit scoring model gives little weight to the activity of authorized users because you are not liable to pay.
If you are new to credit or your credit score is in the dumps, become an authorized user on someone else's credit card account may have a positive effect on your credit score, but not as much as if you are the primary account holder.
If you can not get your own credit card
If you have been denied because you are new to credit or you have bad credit, try to find someone who is willing to be a co-signer on your application and apply for a card from the publisher that receives the application together.
Keep in mind, however, that some people may be worried about being a co-signer on a loan or credit card because they put their credit on the line to assist you. If you're having trouble finding a co-signer, you have several options.
First, consider a secured credit card. You'll usually have a better chance approved for secured cards because card issuers require a security deposit, usually equal to your credit limit, so it is less risky for it to approve your application. You also will be the primary account holder on the card, so use your card will help build your credit score.
If that does not work, try to get added as an authorized user. In some cases, the primary account holder can even set a spending limit on your card if he is worried about adding you.
Remember that credit building often takes time and patience. Although your choice may be limited now, building a good credit behavior beginning of the end can put you on the right path to excellent credit. how to apply for a credit card with a cosigner
