Released: August 05, 2007

Credit scores will change for authorized users

Source: Eileen Ambrose, Baltimore Sun (Free Registration)

Potentially millions of consumers will soon see a change in their credit score, and in some cases it might disappear altogether. It’s not because of anything they’ve done. Rather, the formula for the widely used FICO credit score is about to change. Fair Isaac Corp., creator of the FICO score used by lenders, says it will no longer consider authorized user accounts when factoring a consumer’s score.

An authorized user of a credit card is free to use the plastic, but doesn’t have to pay the bill. Parents often make a child an authorized user of their card to give a youngster access to credit. But this has other perks. The child inherits the parents’ credit history. And if it’s a good one, the child receives a high credit score.

But some Internet-based credit-repair firms have been using this to boost the credit scores of strangers with poor credit. The firms pay a person with an excellent credit score to add someone with a rocky record as an authorized user on a card for a few months.

Read Full Article: Credit scores will change for authorized users