New Fico Score to Include Authorized User Data

Fair Isaac said recently that its new Fico Score 08 would include authorized user accounts, which should benefit millions of legitimate consumers who rely on such accounts to build a solid credit history.

In an attempt to stamp out credit score piggybacking, the company had said it would no longer give consumers any benefit if they were added as authorized users on existing credit card accounts.

But apparently the company figured out a way to ensure that authorized users who weren’t trying to game the system could actually receive some benefit, while those selling tradelines and looking to manipulate the system would see no gain.

“This breakthrough resolves an industry problem that we know has perplexed lenders and concerned regulators,” the company said in a release.

“We have developed technology that will reduce any impact on the FICO 08 score from intentional tampering, while allowing the scores of spouses and other genuine authorized users to benefit from their shared credit experience.”

Although the company wouldn’t make clear what changes took place to their algorithm, I would guess that authorized user accounts being factored into credit scores going forward must be family related.

So children will still benefit from being on their parent’s credit cards, and spouses will still inherit credit history on shared accounts.

But those who knowingly buy tradelines that exhibit zero familiarity or common-sense relationship will probably be singled out and dropped from the credit scoring process.

The company said it estimates that more than 50 million consumers in the United States are legitimate authorized users on another consumer’s credit card.

Fico 08 should be released in the very near future, barring any other changes to the algorithm.

(photo: uncleweed)

Related Topics:

1. Fair Issac to Make Changes to Fico Score Formula
2. Fair Isaac to End Credit Piggybacking Practice
3. Fico Score to Get a Makeover
4. The Credit Score Black Market: Buying and Selling Trade Lines
5. Fico Loses Trademark on 300-850 Credit Score Range