Consumer Alert: FICO Scores Dropping Authorized User Accounts

Consumer Alert:
FICO Scores Dropping Authorized User Accounts

A major change to the FICO® credit score formula was announced by Fair Isaac Corporation recently. FICO scores will no longer factor authorized user accounts into their credit scoring formulas.

Consumers who are listed as authorized users on credit card accounts will likely see a significant change in their credit scores when this modification takes place later this summer.

For most consumers, this change will have a negative impact on their credit scores. Only consumers who are listed as an authorized user on negative accounts or accounts that have balances that are close to the credit limit will possibly see an increase in their credit scores.

Adding a family member or friend as an authorized user on an existing credit card account has long been used as a way to establish credit, especially with husbands and wives. Many parents added their children as authorized users in order to help them build their credit history.

However, credit repair organizations have also started using this system as a way to fraudulently sell authorized user account access to consumers with credit problems. This credit repair loophole was part of the motivation for the FICO score change.

YOU NEED TO CHECK YOUR CREDIT REPORT TO SEE IF THIS CHANGE WILL HURT YOUR CREDIT SCORE.  IF YOU ARE NOTED AS AN AUTHORIZED USER PRESENTLY, YOU MAY WANT TO OPEN YOUR OWN ACCOUNTS.

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Published 28 January 08 10:17 by Jake Lee
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