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08-10-2012 09:27 AM - edited 08-10-2012 10:57 AM
I wanted to also send you this email in regards to the recent changes on authorized user accounts that are being reported to the credit bureaus.
All authorized user accounts that are on a individual's credit report will not have the age account history in relation to the original accounts holder's history. Let's say your dad has added you as an authorized user & has had the account opened for twenty years from 08/10/1992. The new change will only report the authorized user's open date from the date that it was added on. So for example if the authorized user account was added on 01/31/2012 then as of 08/10/2012 the account is only 7 months old. As a result a lot of authorized user accounts will cause their score to drop
08-10-2012 10:27 AM
08-10-2012 10:56 AM
I was told by someone that is an authorized user as well as a person that is working with a mortgage company. So now the new rules are as follows. it is when the authorized user account was added not the entire age history of the original card holder.
08-10-2012 11:37 AM
08-10-2012 01:45 PM
It is up to each creditor to decide how to report AU accounts ~ but in general most AU accounts will reflect the entire history of the account. FICO® scoring also continues to score AU accounts the same as individual accounts.
Just because one creditor might decide to report AU's form the date the AU was added doesn't mean every other creditor will do the same thing. This is definitely a YMMV situation.
12-02-2012 11:40 PM
I just looked at the CrediKarma report for my kids who I added as authorized users. Really dissapointed now to see all the new accounts as being the date they received their AU card instead of the date I openned the account. It dropped their scores significantly. They now have an "F" rating on age of account because I added them to several accounts. It used to not be this way. I am going to need to drop their added cards. I hope it didn't mess them up to bad.
12-03-2012 05:37 AM
Don't go by what CK posts. They don't factor the dates the same as FICO does, also they don't factor in the AAoA of closed accounts.
12-03-2012 06:47 AM
Why don't you cosign for them or have them start by opening am account at a credit union. My credit union will with a $ 100 limit. Or have them get a secured account. These are great for teenagers that have just turned 18 years old. The reason the changes were made is because the score is there to measure an individual's credit risk or credit worthiness. A score that is just given to someone as a result of piggybacking or borrowing a trade line from another person has no way of doing that. There are some lenders that will not use an authorized user account for those reasons & Chase Bank is one of them. I also just listened to a segment online a few days ago & fico will not include authorized users by this September. Just look at all the mortgage loans & other types of credit that people have gotten in 2008 or before that should never have gotten them in the first place. Let me ask you this questions. If your son or daughter has nothing but authorized user accounts on their credit profile with Equifax, Experian, & Transunion, then how is the lender supposed to determine what kind of credit risk they may be???? It also depends on who you talk to and what their point of view is on this. I have talked to different creditors, executives in the credit bureaus, & some of our law makers in Washington, DC to which this has gotten their attention. Some of them have expressed the same concern as if you were to compare it to the credit crisis in 2008 where many have gotten credit that never should have in the first place. On a last note it is only a certain time before more changes are made. And one of them includes a compete ban of authorized user accounts being on any credit report with the three major bureaus.
12-03-2012 07:46 AM - edited 12-03-2012 07:46 AM
I also just listened to a segment online a few days ago & fico will not include authorized users by this September. .................Just look at all the mortgage loans & other types of credit that people have gotten in 2008 or before that should never have gotten them in the first place. Let me ask you this questions. If your son or daughter has nothing but authorized user accounts on their credit profile with Equifax, Experian, & Transunion, then how is the lender supposed to determine what kind of credit risk they may be???? It also depends on who you talk to and what their point of view is on this. I have talked to different creditors, executives in the credit bureaus, & some of our law makers in Washington, DC to which this has gotten their attention. Some of them have expressed the same concern as if you were to compare it to the credit crisis in 2008 where many have gotten credit that never should have in the first place. On a last note it is only a certain time before more changes are made. And one of them includes a compete ban of authorized user accounts being on any credit report with the three major bureaus.
That info could be a little outdated, unless a new round of discussions are at play. FICO had announced in the late summer/early fall of 2008 that they would exclude AUs from FICO scoring. This was in response to the credit crunch and because many lenders were seeing high rates of default from those who engaged in piggybacking. Lenders have input of course on FICO and it was that input that led to the announcement. This was to occur on the latest version of FICO (FICO08 or FICO8 depending on what you call it). However, after a review of the legalities of it, FICO backed off and reverse their decision and re-included AUs on the newest FICO versions. The Equal Credit Opportunity Act was interpreted to prohibit the exclusion of AUs and it was that law that led to the reversal.
IMO, AUs should be excluded. It should be excluded for the piggybacking issue. Also if you stroll in Mortgage Loans board, some have posted their lender would routinely exclude AUs from consideration in the mortgage process, and yet others would ask the borrower-to-be to remove themselves from the AU as a condition for approval.
12-03-2012 08:08 AM
This has nothing to do with this topic being brought up in 2008. The truth in lending & other appropriate changes to the authorized users is being considered by the law makers. I do not believe that they have not included the folks at Fico or Myfico because it related to the credit bureaus. In other words Fair Isaac would not have to do a thing because once the law is changed & no more authorized users are on a indivdual's credit profile, then the fico score would only go off of what was being reported. These are new discussions as we are speaking now.
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