Bad news for credit piggybackers

Roadblocks prevent authorized card users from buying homes

Q: The underwriter assigned to my mortgage has rejected it on the grounds that my excellent credit score may be due to my being an authorized user on my grandfather’s credit card. My own credit record is perfect but so is my grandfather’s, and the underwriter says that unless he can get a credit report based on my credit record alone, my application will be rejected. What do I do?

A: My advice is to take yourself off your grandfather’s card. The only other option is to change lenders, but that will cost you and there is no assurance that another lender would look at matters differently.

An "authorized user" is someone a credit card holder allows to use his card. There are about 50 million of them. The cardholder is responsible for the charges of the authorized user, while the authorized user is not responsible for paying any charges, including his own. An authorized user is different from a co-applicant, who is responsible for paying all charges, including those made by the principal cardholder.