I don't remember seeing one thread that covers all aspects of an AU account, but I will give a summary of the knowledge I have collected and others can chime in and add their knowledge.
AU Reporting
When an AU account reports the authorized user will gain the age and payment history (positive or negative) from that account*. The balance and limit of that card will be added to the balances and limits of the authorized user's profile. There are different reporting timeframes for how soon specific banks will report AU accounts and I am very much uninformed on these timeframes.
*Amex AU accounts report as a new card and the user will not gain any payment history or aging benefits, in fact the AAoA will decrease as the Amex AU will essentially report as a new card.
Benefits and Downsides of AU accounts
AU accounts are most beneficial to young and thin profiles, proving very helpful for those who are starting to build credit and those who are rebuilding. For an AU account to be most beneficial, it should be older than the AAoA of the recipient, have very low utilization, and have positive payment history. Conversely, if an AU account is younger than the AAoA, has high utilization, or has negative payment history then the recipient of the AU account could lose points. It is also worth noting that many lenders will discount AU accounts during underwriting which can minimize the positive effects.
Risks to the Original Account holder
I have seen several people ask what is the risk to me if I add someone to my account. The short answer is there is very minimal risk to the Original Account holder, assuming you do NOT give the authorized user the card that you will receive. If the user is given this card then you are responsible for paying any purchases they make as if they are your own.
AU Accounts and AZEO
Practicing AZEO can be complicated by AU accounts. Depending on which score you are trying to maximize you may or may not want to have a balance report on an AU account. For FICO 5,4,2 AU accounts are counted the same as non AU accounts and to maximize your score you would want only one account reporting a small balance (that account can be an AU account or one of your own accounts). For FICO 8 and newer models there are two separate all zero point losses; an AZ loss for your cards and an AZ loss for AU accounts. If you let both your accounts and the AU accounts report zero balance you will be assessed both point losses. To avoid an AU AZ loss and, in turn, maximize F8+ scores you should let one of your own cards AND one AU card both report a small balance.
Anti-Abuse Algorithm for AU accounts (FICO 8 and newer)
There is an anti-abuse algorithm in place for FICO 8 models and newer. There is very minimal information on how this anti-abuse algorithm works. There have been theories that it is related to the authorized user's last name or address matching with the original account holder. However, we have evidence that you can have a different last name, a different address, or both and still have the AU account provide a score benefit. The only way we have found to test this is to let an AU account report a small balance then to let it report a zero balance, if you encounter the AU AZ point loss then the card is actively contributing to your score, if you see no point change then the card has been discounted by the anti-abuse algorithm.
